Labour Market

Editorial . . . . . 

For young people, finding a job is getting more and harder. In the last six years, their share of the nation’s overall labour force has decreased from 17 to 13 per cent, but their population has climbed from 26 to 28 per cent. This situation has put them under mental stress to the point of making mistakes. The bulk of them aren’t even involved in school or training, and for those who are, it’s a cover for hidden unemployment. According to Survey (CPHS), conducted by the CMIE, 17% of the labour force in 2016–17 was between the ages of 15 and 24. This percentage was down to 13% by 2021–2022. Despite the fact that the proportion of people aged 15 to 24 in the total population increased from 26% in 2016–17 to 28% in 2021–22, their labour participation rate decreased throughout this time. This occurrence may have occurred as a result of young people delaying entering the workforce for various reasons. About 15% of those who were working age in 2016–17 reported themselves to be students. By the following three years, this percentage increased by one percentage point each, reaching 18% by 2019–20. Next, it immediately increased by three percentage points to 21% in the pandemic year of 2019–20, and by another two points to 23% in the following year. There are now significantly more students among those who are of working age. Between 2016–17 and 2021–22, there were 121 million more people of working age. The number of students increased by 104 million within the same time span. The labour force also decreased by 10 million people during this time. As per the CMIE report, this suggests that the labour market was unable to absorb the additional labour that was made available by the natural process of population growth and, instead, shed some of the labour that was already employed in the market. It also implies that people did not continue to enrol in school because they were drawn to higher education, but rather because there weren’t enough jobs available.

Therefore, students are proving to be a larger and larger portion of covert unemployment. The employed workforce is ageing as a result of the labour market’s inability to take on new workers. According to the CMIE data, a quarter of all Indians employed in 2016–17 were under the age of 30. This decreased to 21% in 2019–20 and then to 18% in 2021–22. Additionally, the percentage of workers in their thirties has decreased from 25% in 2016–17 to 21% in 2021–22. As a result, the majority of those still employed are in their forties and fifties. By 2019–20, 51% of the workforce would have been in their forties and fifties, up from 42% in 2016–17. Thus, when the pandemic hit India at the beginning of 2020, middle-aged adults made up more than half of the workforce. Their share has increased to 57% by 2021–2022. What a country that was prepared to benefit from demographic dividends was not anticipated to provide was an ageing working population. Additionally, this won’t enable India to achieve the high growth rates it seeks. The workforce’s declining educational level is an issue that is related to this one. Graduates and postgraduates now make up 13.4% of the population, up from 12.9% in 2017–18. After that, it decreased to 13.2% in 2019–20 and then to 11.8 in 2020–21. In 2021–2022, it somewhat rebounded, reaching 12.2%. The abrupt decline in graduate employment and the sluggish rebound are not encouraging for India’s competitiveness. Most of the workforce in India just has a secondary education as their highest level of education. In 2016–17, they made up 28% of the labour force; by 2021–22, that number increased to 38%. People with a maximum education between the sixth and ninth grades have increased in number in a similar way. Between 2016–17 and 2021–22, their percentage increased from 18–% to 29–%. The fact that labour force is ageing and becoming less educated is undoubtedly a worrying development. In order to prevent our youth from falling victim to a variety of sins that endanger not only their personal well-being but also our society and therefore, we must put focus on providing them with jobs.