Construction worker welfare deserves special attention4 min read 22 Aug 2022, 10:28 PM IST
The functioning of Welfare Boards should be improved to ensure that such workers receive their dues
These are some stylized facts about India’s labour market. First, of the nearly 900 million adults of working age, only 45% are either employed or seeking jobs; i.e., they comprise the entire labour force. This makes India’s labour force participation rate (LFPR) one of the lowest among peers. For female LFPR, the ratio is barely 18% and has been falling. Second, the proportion of workers in the informal sector is as high as 90%. These workers do not have any health or retirement benefits and typically do not have enforceable employment contracts. For them, wage and payment delays are not uncommon, and get worse during downturns. Recourse for non-payment is non-existent. Third, unemployment rates are high, especially among the educated youth. This was reported in a recent survey for all states; Rajasthan’s unemployment rate for graduates was 51%. Another stark indicator of this jobs drought was revealed in an answer in Parliament, which said that 220 million Indians had applied for about 700,000 government jobs in the last seven years. That’s a success rate of 0.33%. Despite these minuscule odds, the scramble for a “permanent" government job should be counted as a prominent stylized fact of India’s labour market. Inexplicably, growth in jobs is not commensurate with India’s fast economic growth. Is it thwarted by an inherent bias for capital intensity in industrial production due to the low cost of capital? Or is it also because of the notorious burden of so-called rigid labour laws? The latter may not be a strong factor, since 90% of India’s employed workers are anyway not subject to most labour laws. Yet, if we see the distribution of enterprises across sizes, the graph drops sharply after 10 employees, when labour laws become applicable. Fourth, the lack of formal-sector jobs also shows in the earnings data of workers. An estimated 45% of salaried workers earn less than ₹10,000 per month, barely above minimum wages. However, we also see an acute shortage of certain skills, which places a huge premium on these. The sixth is the changing pattern of employment across sectors. As per a CEDA-CMIE survey, the number of manufacturing jobs has halved from 51 million in 2016-17 to 27.3 million in 2020-21. Real estate and construction sector jobs too decreased from 69 million to 53.7 million. The agriculture sector, which would be expected to see an out-migration of workers, saw a slight increase in jobs from 146 to 152 million. Thus, agriculture still hosts over a third of the workforce, though characterized by low worker productivity and disguised unemployment.