Understanding Employment: Economic Activities & Workforce

• This chapter will cover basic concepts of employment such as:
• Economic activity
• Worker
• Workforce
• Unemployment
• This chapter will also cover:
• The participation of men and women in various economic activities
• The nature and extent of unemployment
• Government initiatives for generating employment opportunities

Introduction

• People work in various places, like farms, factories, banks, shops, and homes
• Technology has enabled people to produce factory-based goods at home in villages
• During the COVID-19 pandemic in 2020–21, millions worked from home
• Work provides self-worth and helps people relate meaningfully to others
• Each working person contributes to national income
• Working helps meet the needs of those dependent on them
• Mahatma Gandhi emphasized education and training through various works, including craft
• Studying working people gives insights into a country's employment quality and nature
• It aids in understanding and planning human resources
• It helps to analyze contributions to national income and address social issues
• Mahatma Gandhi said that he objects to the craze for machinery because it leaves thousands without work, to die of starvation.

Workers and Employment

• A worker produces food grains, raw materials, or transports goods
• Gross Domestic Product (GDP) is the total money value of final goods and services produced in a country in a year
• Gross National Product (GNP) is the GDP, plus or minus net earnings from exports and imports
• Economic activities contribute to the gross national product
• Workers are engaged in economic activities, regardless of capacity
• Workers include those temporarily absent due to illness, disability, weather, festivals, or functions
• Workers include those who help the main workers, not just those paid by employers
• Self-employed individuals are also workers
• Indian employment is multifaceted, with some employed year-round and others only for a few months
• Many do not receive fair wages
• All engaged in economic activities are counted as employed
• In 2017-18, India had about 471 million workers
• Most live in rural areas
• Rural workers constitute around two-thirds of the 471 million workers
• Men make up the majority of India's workforce
• Approximately 77% are men
• The remainder are women (including child laborers)
• Women account for about one-fourth of the rural workforce
• Women account for an even smaller proportion, or one-fifth, of the urban workforce
• Women perform duties such as cooking, fetching water and fuelwood, and participating in farm labor
• Often, economists argue that these women should be considered workers, even if unpaid or paid in goods

Participation of People in Employment

• Worker-population ratio indicates a country's employment situation
• The ratio measures the proportion of the population actively contributing to the production of goods and services
• A higher ratio means greater engagement
• A low or medium ratio means a significant portion is not directly involved in economic activities
• To calculate the worker-population ratio for India, divide the total number of workers in India by the total population and multiply by 100
• For every 100 persons, approximately 35 are workers
• The proportion is about 34 in urban areas and about 35 in rural India
• Rural areas have a higher ratio due to limited earning resources and increased workforce participation
• Many rural residents cannot attend schools or training institutions
• Some rural students discontinue their education to join the workforce
• Urban areas have a varied employment opportunities
• Urban residents seek jobs matching their qualifications and skills
• Rural residents cannot afford to stay at home if their economic condition does not allow
• Compared to females, more males are found to be working
• The difference in workforce participation is very large in urban areas
• Only about 14 out of 100 urban woman are engaged in some economic activity
• For every 100 rural women about 18 participate in the employment market
• Economists suggest that women's household work should be added to the number of women workers.

Self-Employed and Hired Workers

• Worker-population ratio helps say things about the status in society or about working conditions
• Knowing a worker's status in an enterprise helps determine the quality of employment
• The worker-population ratio can show one dimension of employment quality in a nation
• Workers who own and operate an enterprise to earn their livelihood are known as self-employed.
• About 52 percent of Indian workers are self-employed
• Construction workers are known as casual laborers, accounting for about 25% of India’s workforce
• Civil engineers working in construction companies account for 23 percent of the Indian workforce
• Workers engaged by someone or an enterprise, and paid wages regularly, are known as regular salaried employees
• Self-employment is a major source of livelihood for both men and women
• Casual wage work is the second major source for both men and women

Employment in Firms, Factories, and Offices

• As economies develop, labor shifts from agriculture to industry and services
• Workers migrate from rural to urban areas
• Later, industry loses total employment share as the service sector rapidly expands
• There are generally eight industrial divisions of economic activities:
• Agriculture
• Mining and Quarrying
• Manufacturing
• Electricity, Gas, and Water Supply
• Construction
• Trade
• Transport and Storage
• Services
• These can be grouped into three major sectors:
• Primary: Agriculture and Mining
• Secondary: Manufacturing, Electricity, Gas and Water Supply, and Construction
• Service: Trade, Transport and Storage, and Services
• The primary sector is the main source of employment
• The secondary sector provides employment to only about 24% of India's workforce
• About 31% of workers are in the service sector
• About 60% of rural India's workforce depends on agriculture, forestry, and fishing
• About 20% of rural workers are in manufacturing, construction, and other industrial activities
• The service sector employs about 20% of rural workers
• Agriculture is not a major source of employment in urban areas
• About 60% of urban workers are in the service sector
• The secondary sector provides employment to about one-third of urban workforce
• 57% of the female workforce is employed in the primary sector, while less than half of males work there
• Men find opportunities in secondary and service sectors

Growth and Changing Structure of Employment

• Key developmental indicators are employment growth and GDP
• Nearly seventy years of planned development have aimed to expand the economy through increasing national output and employment
• From 1950 to 2010, India's GDP grew positively, exceeding employment growth, but there were always fluctuations in the growth of GDP
• During this period, employment grew at the rate of not more than 2 percent
• Employment growth started declining in the late 1990s
• This reached the level of growth India had in the early stages of planning
• There has been a widening gap between GDP and employment, resulting in jobless growth
• Jobless Growth means the economy is able to produce goods and services without generating employment
• Developmental strategies seek to reduce dependence on agriculture
• In 1972-73, approximately 74% of the workforce was engaged in the primary sector
• By 2011-12, this proportion had declined to about 50%
• Secondary and service sectors indicate promising future for the Indian workforce
• The shares of the secondary and service sectors have increased from 11% to 24%, and 15% to 27% respectively

Informalisation of the Indian Workforce

• The proportion of hired work jobs or working for others has been growing
• Since independence, India's development planning has aimed at providing decent livelihoods, including better living standards
• Over 70 years of planned development, more than half of the Indian workforce depends on farming for livelihood
• Over the years, the quality of employment has been deteriorating
• Labor laws are meant to protect the rights of workers, who may form trade unions to bargain for better wages and social security
• The workforce is classified into two categories:
• Formal (organized)
• Informal (unorganized) sectors
• Formal sector establishments include:
• All public sector establishments
• Private sector establishments employing 10+ hired workers
• All Workers working in the formal sector are formal sector workers
• The informal sector includes:
• Farmers
• Agricultural laborers
• Owners of small enterprises
• People working in those enterprises Self-employed individuals without hired workers
• The infromal sector also non-farm casual wage laborers who work for more than one employer
• Only about 6% of workers are employed in the formal sectors
• Approximately, 94% work in the informal sector
• Working in the formal sector offers social security benefits and higher earnings than the informal sector
• The formal sector employed about 20% women, while the informal sector employed about 30% women
• Since the late 1970s, many developing countries, including India, have started focusing on enterprises and workers of the informal sector
• in the informal sector workers do not get regular income and do not have any protection or regulation from the government.
• Recently, the Government of India, along with the International Labor Organisation (ILO), have intitiated social security measures for the informal sector workers.

Unemployment

• Unemployment can be seen when are looking through newspapers, or in select populated areas
• The National Statistical Office defines unemployment as lacking work but seeking it through various means
• Economists define unemployed person as one who is not able to get employment of even one hour in half a day
• Data on unemployment comes from the Census of India, National Statistical Office's Reports, and Directorate General of Employment and Training
• Although they provide different estimates of unemployment, they do point to the main attributes of the unemployed.
• Open unemployment has to do with the main description of the section, when people do not get enough work
• Disguised unemployment is common in Indian farms
• A farmer with four acres needs only two workers, but employs five or more
• Disguisedly unemployed workers account for roughly one-third of the workers in India

Government and Employment Generation

• The Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA) promises 100 days of wage employment to rural households
• Since independence, the Union and State governments have played a role in the labor sector
• The role of goverment ca be broadly categorized into direct and indirect
• The government hires people for various departments for administrative purposes directly
• When there is an increase in output of goods and services from government enterprises, private enterprises will also increase input.
• Programs aim to provide employment, services, primary health, primary education, drinking water, nutrition, and development of community assets.

Conclusion

• India's workforce is changing, with new jobs emerging in the service sector
• High technology and outsourcing support small-scale enterprises and specialist workers alongside multinationals
• Employment is becoming more informal with limited social security for workers
• Rapid GDP growth has occurred alongside rapid increases in products and services
• Simultaneously, there has not been an increase in employment opportunities
• This has forced the government to take action in generating employment opportunities particularly in the rural areas
• All those persons who are engaged in various economic activities contribute to the gross national product
• About two-fifth of the total population in the country is engaged in various economic activities
• Primary sector contributes greately to the men workforce, particularly in rural settings
• Casual wage laborers and regular salaried employees account for less than half the proportion of India's workforce
• About three-fifth of India's workforce depends on agriculture and other allied activities
• The growth of employment has decelerated in recent years