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In Context
- The recent Periodic Labour Force Survey (PLFS) Report mapping till the first three months of the pandemic (April-June 2020) has indicated 2 specific trends:
- Reversal of the falling share of agriculture
- A decisive turnaround in declining female participation
- Both of these trends signify a break from the steady structural transformation in the labour market over the last 2 decades.
Periodic Labour Force Survey (PLFS)
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Source: PIB
Key Findings of PLFS, their Significance and Misleading Nature
- Based on the “usual principal status” and the “subsidiary status” approach following trends were observed:
- Surge in Female Labour Force Participation Rate
- It can be interpreted as a positive sign but there is a catch.
- Much of this increase is in the most sub-optimal category of unpaid family workers.
- It can be interpreted as a positive sign but there is a catch.
- Rise in Employment in Agriculture
- In agriculture,, the PLFS data show that in 2019-20, there has been an increase in the percentage of those reported to be working in the sector (45.6%).
- This comes after decades of a progressive fall that signalled movement to high productivity jobs outside.
- Agriculture constitutes about 16 percent of the GDP
- The rise in agriculture, too, is mostly in this category- those working in household enterprises without drawing wages.
- Decline in Manufacturing Employment
- The surge in Agriculture for 2019-20 corresponds to a decline in manufacturing and construction in the latest survey.
- Signs of Distress before Pandemic
- GDP had slowed down, demand had declined and manufacturing was not expanding even before the pandemic.
- Between 2004-05 to 2011-12, many exited agriculture to join the construction sector with a big push to infrastructure
Source: IE
Reasons Behind such Controversial Trends
- Household distress precipitated by the steady fall in GDP growth rates over the past years.
- Farm labour surge to a “hard lockdown” in urban areas due to Pandemic during April-June
- The Twin Balance Sheet problem affected growth after 2011-12.
- With the inability of the construction sector to absorb and slowdown in the manufacturing sector, workers got pushed back into agriculture.
- Demand-side constraints, viz., that women’s participation is falling due unavailability of steady gainful employment.
- Women are likely to be displaced from employment by male workers, especially when there are negative economic shocks e.g. demonetisation or the pandemic.
- Industries that employ women haven’t done well.
- Unlike Bangladesh, we did not have labour intensive manufacturing.
- Even though rising education levels have been seen among females, there aren’t enough good jobs for them
Conclusion and Way Out
- Lot of people lost jobs during the pandemic and agriculture became the employment of last resort.
- The PLFS estimates are instead an early warning of a structural crisis.
- The first three quarters also suggest that a structural retrogression in the economy was underway before the pandemic.
- There is a huge need for the creation of productive and remunerative jobs.
- Also, a better indicator for the extent of joblessness in the economy would be the number of hours worked.
National Statistical Office (NSO)
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