The quality of employment has deteriorated in 12 of the 21 major states and Union Territories, as the proportion of workers in regular or salaried jobs declined between July 2022 and June 2023 compared to the previous year, according to a Business Standard analysis of the latest Periodic Labour Force Survey (PLFS) released by the National Statistical Office.
Assam experienced the most significant decline in the share of workers in salaried work, dropping by 8.7 percentage points to 10.8 per cent in the July 2002-June 2023 period from 19.5 per cent in the July 2021-June 2022 period.
This was followed by Delhi (6.2 percentage points), Uttarakhand (5.2 percentage points), and Chhattisgarh (1.6 percentage points).
The “usual status” measure of employment, which classifies a person according to the type of work they would have engaged in during a one-year reference period, showed an increase in self-employment and casual work in these states during this period.
Regular wage or salaried work, where workers receive fixed wages at regular intervals, is generally considered a better form of employment than casual work or self-employment, which consists of working as unpaid household help, primarily in agricultural fields or owning a small informal enterprise.
At the national level, the share of workers in regular wage work also declined to 20.9 per cent from 21.5 per cent during the period under consideration.
This decline in employment quality comes despite the unemployment rate in the country falling to a six-year low of 3.2 per cent and the labour force participation rate (LFPR) reaching its highest level (57.9 per cent) since the NSO began releasing the annual survey in April 2017.
Santosh Mehrotra, a visiting professor at the University of Bath, noted that despite popular belief, labour markets have yet to recover as wage employment remains significantly lower than pre-pandemic levels, leading to an increase in self-employed individuals.
The share of people working in agriculture also increased slightly during this period, indicating distress in rural labour markets.
The share of people engaged in agriculture increased to 45.8 per cent from 45.5 per cent.
Punjab saw the sharpest increase of 2.5 percentage points in its regular wage workforce to 33.4 per cent, followed by Haryana (2.2 percentage points), Kerala (2 percentage points), and Telangana (1.9 percentage points).
“The decline of wage employment over the past year and the corresponding increase in labour force participation shows that more people are joining the labour markets and the economy isn't able to generate enough decent jobs for them," Mehrotra said.
“This is leading them to engage in self-employment either as unpaid household help or running a small business.”