Social security: A distant dream

The periodic labour force survey of 2017-18, which had put the extent of joblessness at a 45-year high of 6.1 per cent, has now been studied in detail by economists. One such study by Santosh Mehrotra and Jajati Parida for the Bengaluru-based Azim Premji University has important insights on the job crisis, faced by today’s Indian youth, and the quality of government and private sector jobs in India.

While the transition from agriculture to other sectors is taking place, manufacturing is not providing the necessary buffer before the workforce shifts to the services sector. When the farm sector shed 26.6 million jobs in six years from 2011-12 to 2017-18, the manufacturing sector, rather than absorbing a part this, shed another 3 million jobs. Construction and services sector added 21 million jobs but this was not adequate (Chart 1).

As a result, the number of unemployed youth rose from 9 million to 25 million in that period (Chart 2). Besides, nearly 100 million youngsters today are neither in the labour force, nor are they pursuing education, the authors noted.

Charts 3A and 3B show that the inclination to keep a firm “unorganised”, meaning with less than 10 workers, has risen. At the same time, the propensity to “formalise” the workforce — provide social security — is rising very slowly. Charts 4 and 5 show that both the government-owned and private firms prefer more workers without any work contract. Permanent workers in private firms actually fell in 2017-18, compared to six years ago.

While formalisation in private firms is rising, the pace is slow.

Public firms, however, are increasingly denying social security to workers, show Charts 6A and 6B.