Losing all hope about jobs
MY daughter is reaching that age when she has to choose what she wants to do in life. Does she want to be a writer or an artist? Or does she see herself as an investment banker, vying for that corner office? What she decides now could determine what subjects she reads in high school. Like most liberal parents of our generation, we have left the choice to her. However, there is one option she does not have — the choice to do no work at all. At no point, in our discussions, has it ever crossed our minds that it is possible that she would simply not be part of the work-force. We assume that she will choose a path, study, get qualified, and then work towards a career. But in millions of Indian homes, this discussion would never take place. Not because they do not expect girls to have careers, but because men and women have given up all hope of ever getting any work.
Jobs are available, but they pay so little that people prefer to either remain unemployed, or get out of the workforce.
Before we get into the numbers, let’s acquaint ourselves with some concepts that are used to measure employment and work participation. In most parts of the world, you can legally start working if you are a young adult of 15. So, the working age population consists of everyone who is over 15 years. Not everyone out of these is going to get work or even look for employment. Some would be too old, or too ill. Some might have to stay at home to look after young babies or old parents. Still others might be too affluent to ever have to work. In other words, not everyone participates in the labour force. In rich countries, the average Labour Force Participation Rate (LFPR) is about 60 per cent. In poor countries, it is higher, at about 65 per cent. In lower-middle income countries, like India, about 53 per cent of those in the working age population participate in the labour force.
Five years ago, according to CMIE’s employment data, India’s LFPR was just 48 per cent. This was not just those who were working or were looking for work, but also those who wanted to work, but weren’t actively seeking it. If our LFPR had stayed at that level, an additional 60 million people should have joined the labour force by 2021-22. Instead, our labour force has dropped by 22 million, and the LFPR has come down to a dismal 42 per cent. If the LFPR had been similar to that of other lower-middle income countries, some 575 million people should have been either working or looking for work. Instead, our labour force consists of just 452 million people. That means, about 120 million people who should participate have withdrawn from it.
The government says this is because a larger number of young people are enrolled in high school and colleges, so those between 15-19 years of age have stopped looking for work. The other reason given is the supposed growing affluence of middle class families. As they become better-off, women no longer have to step outside the home to find work. So, women are leaving the workforce in large numbers and pushing down the overall labour force participation rate. On the face of it, this seems to be true — younger adults and women have seen the biggest drop in LFPR. In 2016-17, 24 per cent of young people between 15-19 years were part of the labour force. Five years later, it has dropped to 8 per cent. In the same period, women’s LFPR has dropped from an already low 19 per cent to 11 per cent. The question is whether this sharp drop is voluntary or forced by circumstances.
There is a simple way to test this. If fewer young adults are looking for work, it should be relatively easier for them to find jobs. But that is not the case. Five years ago, 58 per cent of those in the 15-19 age bracket, who wanted jobs, couldn’t get work. Now that has risen to a staggering 75 per cent. Similarly, considering that such few women are available for work, their unemployment rate should be much lower than that of men. The reality is the exact opposite: Women are three times less likely to find work than men. The overall unemployment rate for men in 2021-22 was about 9 per cent, while for women it was over 27 per cent. The situation is worse in cities and towns, where women have an unemployment rate of 36 per cent, again three times that of men.
Fewer young people, in the 20-24 age bracket are working or looking for employment. Five years ago, 49 per cent of them were part of the labour force. That has dropped to just 38 per cent in 2021-22. This should have caused a sharp decline in their unemployment rate as well. After all, who does not want to hire young people? They are likely to be more enthusiastic, have more energy, be ready to work longer hours, take fewer leaves and also expect lower pay. Yet, despite that sharp 11 percentage point drop in their LFPR, the unemployment rate of people in the 20-24 age group has risen from 32 per cent in 2016-17 to 48 per cent in 2021-22. That means, nearly half of those in their early 20s, who want to work, are unemployed.
This data could mean that there are jobs available, but they pay so little that people prefer to either remain unemployed, or get out of the workforce altogether. This is happening to young people, especially graduates, who are not willing to accept jobs which are below their qualification level. They prefer to wait it out, hoping for better jobs. As they grow older, they are forced to accept anything available in the job market. Either way, it is clear that Indians are increasingly losing hope of getting decent work. Ironically, this stoic submission also means that the lack of employment is unlikely to become a political demand in elections. Because, once you accept unemployment as fate, there is no reason to agitate for it.
The author is a senior economic analyst
