No major change in employment status or wages in 10 years
A report by Bahutva Karnataka shows that the share of selfemployed workers increased, while the share of those in formal employment remained low
On March 11, Bahutva Karnataka, a forum for concerned citizens and organisations, released a report titled ‘Employment, Wages and Inequality’, at the Press Club, Bengaluru. The report analyses the progress in various employmentrelated indicators in the last decade, ever since the National Democratic Alliance (NDA) came to power, including employment generation, formalisation of jobs, and improvement in wages.
As the general elections draw near, the report also examines the progress of the NDA’s employmentrelated initiatives. In April 2019, for instance, Prime Minister Narendra Modi claimed that 2.5 crore jobs have been added annually. Data reveal that the share of formal employment with social security and other advantages attached to it has remained stagnant. On the other hand, the number of selfemployed individuals has increased substantially. Further, while wage earnings have increased when adjusted for inflation, the increase is negligible.
The stagnation is reflected in the share of households earning less than the national floor level minimum wage (NFLMW). About 34% of households in India earned less than the proposed NFLMW of ₹375 a day. Further, wage inequality has resulted in widening the gap between the rich and the poor. In 2022, the top 1% and 10% of the population held 22% and 57% of the national income, respectively, while the bottom 50% held 12.7%, according to data from the World Inequality Database.
Chart 1 compares the share of employment across various employment categories in 201112 and 202223 for men and women. Data show that the share of employment in the formal sector remained below 25%. The share of those who were selfemployed remained above 50% by 202223. While the share of selfemployed women was the highest, it also saw the highest growth of 8% points from 56.5% in 201112 to 64.3% in 202223. According to the report, between 201112 and 202223, women doing unpaid labour in their family business or farming rose from one in four to one in three due to lack of other remunerative employment and stagnant household earnings.
Chart 2 shows the yearwise average weekly wages, adjusted for inflation, for male and female regular salaried workers and casual labourers. Data show there has not been any significant growth in income in the last five years across employment categories.
Further, many households earn less than the NFLMW
In 2019, an expert committee, set up by the Ministry of Labour and Employment, recommended that the NFLMW should be at least ₹375 per day and ₹3,050 per week. Of the 34 States and Union Territories (UTs) analysed, in about 19 of them, more than 20% earned less than ₹375 a day or less than ₹3,050 a week in 202223. In Chhattisgarh and Uttar Pradesh, above 50% of the households earned less than this threshold. The report adds that nearly 30 crore workers make less than the minimum wage.
The stagnancy in income growth among the majority of the population, when juxtaposed with India’s increased GDP per capita, hints at a widening gap between the rich and poor. In the last 10 years, GDP per capita increased by 60%, while close to 35% of the total households earned less than the NFLMW. The share of national wealth held by the wealthiest 10% of the population increased from 63% in 2012 to 64.5% in 2022, while the share held by the poorest 50% reduced further from 6.1% in 2012 to 5.6% in 2022
The chart shows the yearwise wealth share of the top 10% and the bottom 50% of the population. still