Since the Covid-19 pandemic started in 2020, economies all around the world have learnt that they must balance lives and livelihood to survive. In 2022, India got the first part of this act almost right, due to both the natural trajectory of the pandemic and widespread adult vaccination. Not only were infections fewer (95% and 40% of that in 2020 and 2021), they also led to much fewer (officially recorded) deaths (34% and 15% of that in 2020 and 2021). This has also helped recovery in livelihoods. GDP went above pre-pandemic 2019 levels for the January-September interval for the first time this calendar year since 2020. Does this also mean a recovery in jobs? The answer to this question is not as simple as one might expect from the official numbers available for 2022. However, these numbers give an idea about the employment situation.
Number Theory: Tracking employment data in ’22 as jobs return 2 yrs after Covid
Unemployment a smaller problem for urban India in 2022 than even in 2019
The complete data on jobs for India – collected in the Periodic Labour Force Survey (PLFS) – is only available only up to June 2021. However, the National Statistical Office (NSO) has published key numbers for urban areas up to the quarter ending September 2022. These show that 2022 was a better year than even 2019 in terms of the urban unemployment rate. Urban employment in the March, June, and September quarter of the 2022 calendar year was the best, second best, and fourth best since the quarter ending June 2018, the earliest period for which these bulletins have data. To be sure, job market comparisons are best made for the same quarter across years, as some jobs, such as those in agriculture, are seasonal. This paints an even better picture. Urban unemployment was the lowest ever in each quarter in 2022. This was not because people stopped looking for jobs. Labour force participation rate (LFPR) – the share of population working or looking for a job – was also consistently higher in 2022 than earlier. LFPR was the second highest for the March quarter this year and the highest in June and September for those quarters.
But this could be the result of people’s desperation to take up any available job
To be sure, the employment scenario might not be as good as these numbers suggest it is. For example, if all was good with jobs, why would the government continue distributing food grains to 60% of the population even in 2022? The answer to that and the good employment numbers is that the numbers above do not show the complete picture of the job market. The quarterly bulletins also show that the share of regular wage employees – who are the best paid on average -- among workers was the second-lowest for those quarters in March and June and the lowest (tied with 2021) in the September quarter. What kind of jobs did urban India take up then? It was mostly self-employment. The share of self-employed was the highest, third highest, and highest in for the three quarters of the 2022 calendar year. To be sure, these rankings should be read carefully. For example, the highest proportion of salaried people among workers was in April-June 2020. However, that was likely only because casual workers simply lost jobs during the lockdown, their proportion in that quarter nearly half of that in 2019.
2021 numbers show why quarterly bulletins need to be read carefully
The two sets of numbers above suggest that the pandemic’s long-term impact is on quality rather than quantity. While this is broadly true, even this conclusion misses part of the picture. This is because the self-employed category includes the subcategory of unpaid workers in a family enterprise (data on this is published with annual unit-level data). While these workers are considered employed usually, unit-level PLFS data available up to June 2021 confirms that these are not usual times. For each quarter of the pandemic after June 2020 (the period of the harshest lockdown), the share of such workers in the labour force was higher than the respective pre-pandemic quarter. If they are considered unemployed, unemployment rate shows a slower recovery. For example, in January-March 2021, overall unemployment rate was 6.58%, the lowest rate for that quarter. With unpaid workers considered unemployed, the rate would have been 20.6%, same as in April-June 2020 and higher than the 18.2% rate in 2019. This is why the shift to self-employment in quarterly bulletins of 2022 can be completely understood only with unit-level data which is still not available.
Consumer sentiment data suggests a similar trajectory of the job market
The conclusions drawn above are supported by the Consumer Confidence Survey conducted by the Reserve Bank of India in major cities. This shows that sentiments related to current job and income are improving but remain negative. This means that more people continue to think that employment and income situation has worsened compared to a year ago than those who think it has improved. To be sure, this was the case with current job sentiments even before the pandemic. They were actually less negative in November 2022 (latest data) than in November 2019. However, this was not true for current income sentiments, which is to be expected from the qualitative impact of the pandemic seen in PLFS data.
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