Most regular jobs in India don’t pay well: PLFS

The much-awaited report of the Periodic Labour Force Survey (PLFS) 2017-18 has highlighted the difficult job situation with 6.1% of India’s labour force, and 17.8% of young people (15-29 years) in the labour force reporting to be unemployed.

The recently released unit-level data of the PLFS suggests that job market conditions in the country are more worrisome than what the headline numbers reveal.

The data shows that the proportion of the workforce engaged in regular wage/salaried jobs increased by 5 percentage points between 2011-12 (when the last NSSO employment unemployment survey was conducted) and 2017-18. But this increase was partly because of the denominator effect (the overall workforce declined by 4 percentage points between 2011-12 and 2017-18). As a share of the population, regular workers increased only by one percentage point to 8% over the same period.

Moreover, it is worth noting that India still lags far behind its South Asian neighbours and developing economies such as China (53.1%), Brazil (67.7%) and South Africa (84.8%) in the share of salaried or regular jobs.

While the comparability between PLFS and the previous NSSO EUS rounds has been debated, the PLFS report itself compares the two sets of surveys. To ensure comparability as far as possible, only data from the first visit of PLFS has been used in this analysis (urban households in the survey were revisited by PLFS enumerators, and the revisit data has not been considered here).

Regular jobs are important and in high demand globally because they tend to offer better pay and job security. Not surprisingly, the median daily earnings were higher for men and women in regular jobs, as compared to self-employment and casual work, the PLFS data shows. Across categories of the workforce, wages and earnings were higher in urban areas than in rural areas, and for men than for women.

However, not all salaried jobs guarantee high pay. In 2017-18, around 45% of regular workers earned less than ₹10,000 per month, and about 12% earned less than ₹5,000 per month. As many as 63% of regular women workers earned less than ₹10,000 per month, and 32% had a monthly salary of less than ₹5,000. In rural areas, 55% of regular workers earned less than ₹10,000 per month, while the corresponding proportion was 38% in urban areas.

Overall, 72% of regular workers earned below the minimum monthly salary of ₹18,000 prescribed by the 7th Pay Commission. At the other end, only about 3% of regular workers earned a monthly salary between ₹50,000 and ₹1 lakh, and 0.2% earned over ₹1 lakh per month, the PLFS data suggests.

The skewed distribution is not surprising given that about 15% of regular workers were engaged in elementary occupations such as building caretakers, garbage collectors and manual workers. This includes 21% of women regular workers and 13% of men regular workers. The median earnings of these workers was only about one-fourth of the top-earning occupational group (legislators, senior officials and managers).

The median earnings of those in elementary occupations ( ₹7000 per month) was the lowest among salaried workers, followed by service workers and those engaged in skilled agricultural work and fisheries (median earnings of ₹8000 per month for both sets of workers). The median earnings of the self-employed was at the same levels as these categories of regular workers ( ₹8000 per month), and higher than that for elementary occupations.

Regular jobs are also demanded because they offer job security. However, about 71% of the regular workers in the non-agricultural sector did not have a written job contract in 2017-18. Absence of a written job contract undermines job security, and the proportion without a job contract increased for both men and women regular workers between 2011-12 and 2017-18. So did the proportion of workers who were not eligible for paid leave.

There was a 5.8 percentage points decline in the proportion of regular workers who were not eligible for any social security benefits between 2011-12 and 2017-18. However, this number continues to be high, and around half of the regular workers were not eligible for any social security benefits in 2017-18.

These findings suggest that the regular workforce in India, considered to be the cream of the workforce, is itself a very heterogeneous lot, and a significant chunk of them are working under poor conditions without the voice or support to change those conditions.

The government’s recent move to avoid setting a national minimum wage of ₹375 (as recommended by an internal committee) seems to fly in the face of such evidence. The government has kept the minimum at half of the recommended level and allowed states to fix their own wages, missing a historic opportunity to create a fair, equitable and standardized national labour market.

Providing a fair wage floor could reduce inequality, the economic survey of 2018-19 said, and enforcing such wages properly could improve both working conditions and employment levels, new research suggests.

This is the first of a two-part data journalism series on jobs in India

Ishan Anand teaches at Ambedkar University Delhi, and Anjana Thampi is a researcher at the Initiative for What Works to Advance Women and Girls in the Economy (IWWAGE) at IFMR LEAD, New Delhi