Introduction
- Work plays an important role in our lives as individuals and as members of society. People work for ‘earning’ a living. Some people get, or have, money by inheriting it, not working for it. This does not completely satisfy anybody. Being employed satisfy anybody. Being employed in work gives us a sense of self-worth and enables us to relate ourselves meaningfully with others. Every working person in actively contributing to national income and hence, the development of the country by engaging in various economic activities – that is the real meaning of earning a living.
- Studying about working people gives us insights into the quality and nature of employment in a country and helps in understanding and planning our human resources. It helps us to analyse the contribution made by different industries and sector towards national income. It also helps us to address many social issues such as exploitation of marginalized sections of the society, child labour, etc.
Workers and Employment
Those activities which contribute to the gross national product are called economic activities. All those who are engaged in economic activities, in whatever capacity – high or low, are workers. Even if some of them temporarily abstain from work due to illness, injury or other physical disability, bad weather, festivals, social or religious functions, they are also workers. Workers also include all those who help the main workers in these activities. We generally think of only those who are paid by an employer for their work as workers. This is not so. Those who are self-employed are also workers.
The nature of employment in India is multifaceted. Some get employment throughout the year; some other get employed for only a few months in a year. Many workers do not get fair wages for their work. While estimating the number of workers, all those who are engaged in economic activities are included as employed. You might be interested in knowing the number of people actively engaged in various economic activities.
Participation of people in Employment
- Worker-population ratio is an indicator which is used for analyzing the employment situation in the country. This ratio is useful in knowing the proportion of population that is actively contributing to the production of goods and services of a country. If the ratio is higher, it means that the engagement of people is greater; if the ratio for a country is medium, or low, it means that a very high proportion of its population is not involved directly in economic activities.
- People in rural areas have limited resources to earn a higher income and participate more in the employment market. Many do not go to schools, colleges and other training institutions. Even if some go, they discontinue in the middle to join the workforce; whereas, in urban areas, a considerable section is able to study in various educational institutions. Urban people have a variety of employment opportunities. They look for the appropriate job to suit their qualifications and skills. In rural areas, people cannot stay at home as their economic condition may not allow them to do so.
- Compared to females, more males are found to be working. The difference in participation rates is very large in urban areas: for every 100 urban females, only about 14 are engaged in some economic activities. In rural areas, for every 100 rural women about 18 participate in the employment market.
Self-employed and Hired Workers
Workers who own and operate an enterprise to earn their livelihood are known as self-employed. Thus the cement shop owner is self-employed. About 52 per cent workers in India belongs to this category. The construction workers are known as casual wage laborers; they account for about 25 per cent of India’s workforce.
When a worker is engaged by someone or an enterprise and paid his or her wages on a regular basis, they are known as regular salaried employees.
When we compare the distribution of workforce in rural and urban areas in Chart 6.2 you will notice that the self-employed and casual wage laborers are found more in rural areas than in urban areas. In the latter, both self-employment and regular wage salaried jobs are greater. In the former, since majority of those depending on farming own plots of land and cultivate independently, the share of self-employed is greater.
Employment in Firms, factories and Offices
In the course of economic development of a country, labour flows from agriculture and other related activities to industry and services. In this process, workers migrate from rural to urban areas. This shift can be understood by looking at the distribution of workers by industry. Generally, we divide all economic activities into eight different industrial divisions. They are (i) Agriculture (ii) Mining and Quarrying (iii) Manufacturing (iv) Electricity, Gas and Water Supply (v) Construction (vi) Trade (vii) Transport and Storage and (vii) Services. For simplicity, all the working persons engaged in these divisions can be clubbed into three major sectors. Primary sector is the main source of employment for majority of workers in India. Secondary sector provides employment to only about 24 per cent of workforce. About 31 per cent of workers are in the service sector. Shows that about 60 per cent of the workforce in rural India depends on agriculture, forestry and fishing.
Service sector provides employment to about 20 per cent of rural workers.
Growth and Changing Structure of Employment
During the period 1950-2010, Gross domestic product (GDP) of India grew positively and was higher than the employment growth. However, there was always fluctuation in the growth of GDP. During this period, employment grew at the rate of not more than 2 per cent. Employment growth started declining and reached the level of growth that India had in the early stages of planning. During these years, we also find a widening gap between the growth of GDP and employment. This means that in the India economy, without generating employment, we have been able to produce more goods and services.
The distribution of workforce in different status indicates that over the last five decades, people have moved from self-employment and regular salaried employment to casual wage work. Yet self-employment continues to be the major employment provider.
Informalization of Indian Workforce
You may find that a small section of Indian workforce is getting regular income. The government, through its laboure laws, enable them to protect their rights in various ways. This section of the workforce forms trade unions, bargains with employers for better wages and other social security measures. Who are they? To know this we classify workforce into two categories: workers in formal and informal sectors, which are also referred to as organized and unorganized sectors. All the public sector establishments and those private sector establishments which employ 10 hired workers or more are called formal sector establishments and those who work in such establishments are formal sector workers. All other enterprises form the informal sector.
Those who are working in the formal sector enjoy social security benefits. They earn more than those in the informal sector. Developmental planning envisaged that as the economy grows, more and more workers would become formal sector workers and the proportion of workers engaged in the informal sector would dwindle.
Since the late 1970s, many developing countries, including India, started paying attention to enterprises and workers in the informal sector as employment in the formal sector is not growing. Workers and enterprises in the informal sector do not get regular income; they do not have any protection or regulation from the government. Workers are dismissed without any compensation. Technology used in the informal sector enterprises in outdated; they also do not maintain any accounts. Workers of this sector live in slums and are squatters. Of late, owing to the efforts of the International labour Organization (ILO).
Unemployment
The National Statistical Office (Previously it was known as National Sample Survey Organisation) defines unemployment as a situation in which all those who, owing to lack of work, are not working but either seek work, are not working but either seek work through employment exchanges, intermediaries, friends or relatives or by making applications to prospective employers or express their willingness or availability for work under the prevailing condition for work and remunerations. There are a variety of ways by which an unemployed person is identified. Economists define unemployed person as one who is not able to get employment of even one hour in half a day.
There are three sources of data on unemployment : Repots of Census of India, National Statistical Office’s Reports of Employment and Unemployment Situation, Annual Reports of Periodic Labour Force Survey, and Directorate General of Employment and Training data of Registration with Employment Exchanges. Though they provide different estimates of unemployment, they do provide us with the attributes of the unemployed and the variety of unemployment prevailing in our country.
Government And Employment Generation
Since Independence, the Union and State governments have played an important role in generating employment or creating opportunities for employment generation. Their efforts can be broadly categorized into two – direct and indirect. In the first category, as you have seen in the preceding section the government employs people in various departments for administrative purposes. It also runs industries, hotels and transport companies, and hence, provides employment directly to workers. When the output of goods and services from government enterprises increases, then private enterprise which receive raw materials from government enterprises will also raise their output and hence increase the number of employment opportunities in the economy. For example, when a government owned steel company increases its output, it will result in direct increase in employment in that government company. Simultaneously, private companies, which purchase steel from it, will also increase their output and thus employment. This is the indirect generation of employment opportunities by the government initiatives in the economy.
Conclusion
There has been a change in the structure of workforce in India. Newly emerging jobs are found mostly in the service sector. The expansion of the service sector and the advent of high technology now frequently permit a highly competitive existence for efficient small scale and offer individual enterprises or specialist workers side by side with the multinationals. Outsourcing of work is becoming a common practice. It means that a big firm finds it profitable to close down some of its specialist departments (for example, legal or computer programming or customer service sections) and hand over a large number of small piecemeal jobs to very small enterprises or specialist individuals, sometimes situated even in other countries.
In the last few decades, there has been rapid growth in the gross domestic product, but without simultaneous increase in employment opportunities. This has forced the government to take up initiatives in generating employment opportunities particularly in the rural areas.
