India’s urban unemployment rate improves across genders, age groups to best-ever level: Survey
The quarterly bulletin of the Periodic Labour Force Survey also suggests that at least some of this improvement is because of a higher than usual engagement in poor quality jobs in the quarter ending June 2022
New Delhi: After recovering to pre-pandemic levels in the quarter ending March 2022, India’s urban unemployment rate improved across genders and age groups to its best-ever level in the quarter ending June 2022, according to the quarterly bulletin of the Periodic Labour Force Survey (PLFS) released on August 31. The bulletin’s data, however, also suggests that at least some of this improvement is because of a higher than usual engagement in poor quality jobs, a trend also seen in the quarter ending March.
India’s headline urban unemployment rate was 7.6% in the quarter ending this June, compared to 8.2% in the quarter ending March, 12.7% in the June quarter of 2021-22, and 8.9% in the June quarter of 2019-20. Since some kinds of jobs, like those in agriculture, are seasonal in nature, unemployment rate comparisons are best made for the same quarter across years. However, the remarkable improvement in this rate can be seen from the fact that it is the lowest rate since the quarter ending June 2018, the first quarter for which the quarterly bulletins have data. This improvement is also neither because of fewer people seeking jobs nor because of any lopsided improvement. However, at least some of it is because of engagement in poor quality jobs.
That the improvement in unemployment rate was not lopsided can be seen from the fact that it improved across groups. The quarterly bulletin gives a breakup of unemployment rate by gender and by three age groups: all ages, 15-29 years, and 15 years and above. Unemployment rates for all these groups was the best in the quarter ending June.
Similarly, at 37.2% the labour force participation rate (LFPR) — or the share of population working or seeking work — in the first quarter of the current financial year was the highest for this quarter for any year since 2018-19 and 10 basis points (100th of a percentage point) higher than in the first quarter of last year. While LFPR was not at its best level in the quarterly bulletin’s history like the unemployment rate, it is enough for it to be best for the June quarter because of the seasonality factor.
These numbers make it clear that a larger than usual share of India’s urban job seekers found jobs in April-June 2022 despite the number of job seekers being high. However, a significant part of the relief from unemployment was because of poor quality jobs. Among urban workers, 48.6% were in regular wage employment (the best paid among different kinds), the lowest share since the 2019-20 financial year. To be sure, this does not mean that the job scenario was even worse than in the June quarter of 2020-21. In that quarter, a large number of casual workers lost jobs and increased the proportion of regular workers in the total.
The broad industry-wise breakup of workers further shows that employment prospects improved due to poor jobs. The share of workers in agriculture, secondary sector (which includes sectors like manufacturing and mining), and tertiary sector (comprises of services) was 5.7%, 34%, and 60.3%, respectively. The share in agriculture is an improvement over the June quarters of FY 2021-22 and FY 2020-21, both affected by lockdowns, but not over FY 2019-20, when only 4.9% were in agriculture. The share in tertiary sector was similarly a higher 62% in FY 2019-20, a clear sign that though people are seeking and finding jobs with the pandemic in control, they may not be earning as much as they did before the pandemic. These signs will be confirmed or rejected when the unit-level data becomes available.