The release of periodic labor force survey (PLFS) data for April-June’20 quarter, the peak lockdown months, gives a comprehensive view of the extent of job losses. As per the survey, urban unemployment rate reached a level of 20.9% during the quarter. The dis-aggregated figures reveal that stress was as high as 59% for specific segment at state level. Here is a look at some of the details.
PLFS is a quarterly report based on actual survey, started in April’17, done by NSO (National Statistical Office) to assess the actual status of employment. Other than quarterly report which gives details of urban area only, the annual report gives status across both urban and rural India. The latest survey, conducted during April-June’20 was unusual since part of the survey was done telephonically due to Covid-19 restrictions.
Before looking at the data, it would be pertinent to understand some of the terminologies. The first is Labor force participation rate (LFPR) which refers to the percent of the population which is employed or is looking for a job opportunity. The second is Unemployment rate (UR) defined as the percentage of unemployed persons as a percent of LFPR. As per PLFS definition, a person is unemployed if he/she did not get work for even one-hour duration over previous one week. Worker Population Ratio (WPR), defined as the percentage of workers in the total population, can be deduced from the above two ((1-UR)*LFPR). Only current weekly status (CWS) has been estimated and usual status which taken into account one-year period is not included in this survey.
The unemployment rate (UR) for the quarter at 20.8% with UR for females being marginally higher than males. This implies one out of every five urban individual seeking employment did not get a job. (All figures for population above 15 years of age). The figure is more than double the average of 8.5% in the previous four quarters. Not only did UR increase sharply, even LFPR fell, although slightly from 48.1% to 46%. Lower LFPR is also a reflection of economic stress as lesser individuals seek job when they perceive that chances of getting a job are low. (An unusual feature of Indian economy is that female LFPR is very low, averaging around 20% against 73% for males). With an increase in UR and decline in LFPR, WPR ratio came down sharply from 43.7% to 36.4%. Assuming average life-span of 65 years and population evenly distributed, population above 15 years of age works out to 100 crores. Change in WPR implies more than 7 crore people lost their jobs during the quarter. It must also be noted that as per the definition, a person is considered employed if he/she got even one-hour of job during the previous seven days. If the definition is made more rigorous to consider at least one day of employment, UR rate could worsen considerably.
The high UR figure, still, does not reveal the complete picture. For the age group 15-29 years, UR was as high as 34.7%, meaning every third person in this group was unemployed. Worst hit among major states in this age group for males were Jharkhand with UR going up from 21% to 52%, Maharashtra – 12 to 47%, Telangana – 28% to 41% and Andhra Pradesh – 33% to 49%. Only state to offer some relief was Gujarat where UR went up only marginally from 8.5% to 12%. For Females, worst hit was Karnataka with UR going up from 14% to 45% and Kerala from 48% to as high as 59%. Job losses is higher for this group possibly because of higher temporary engagement as trainees/ interns etc. However, unemployment within this groups is bigger concern as this, possibly, is the most productive age-group as far as blue-collared jobs are concerned. Not finding suitable avenue to channelize this resource is a great loss for the economy.
The report analyses data from a large number of dimensions offering important insights. One of them is employment category and status in the current quarter vis-à-vis previous quarter giving information on group-wise job losses. The data shows that within males, casual workers were the worst hit with 58% of them either losing their jobs or going out of labor force. For other two groups, salaried and self-employed, share was 13% and 12%. Figures are worse for females at 65%, 19% and 31% respectively.
The inter-state analysis of data shows some more insights. LFPR fell significantly for industrialized states such as Gujarat, from 66.4% to 59.5%, possibly reflecting migration of labor. (It may be noted that industries’ share in total employment in Gujarat is significantly high at 46% as compared to national figure of 34% (pre-Covid)). For Karnataka and Maharashtra, it fell from 58.8% to 53.1% and 54.2% to 50.9%. Some states such as Madhya Pradesh and Telangana saw increase in LPFR, possibly, as a result of returnees seeking jobs in their home state.
Image courtesy – Ministry of Labour & Employment