Introduction to Work and Employment

Why Do People Work?

Work is a fundamental aspect of human life, playing a crucial role for both individuals and society. People engage in work for a variety of reasons, extending beyond the basic necessity of 'earning' a living.

• Economic Sustenance: The primary reason people work is to earn an income to support themselves and their families. This income allows them to purchase goods and services necessary for life.
• Self-worth and Identity: Being employed gives individuals a sense of self-worth and purpose. It enables them to relate meaningfully with others and feel like contributing members of society.
• Contribution to National Development: Every working person engaged in an economic activity actively contributes to the national income (GDP/GNP). This collective effort drives the economic development of the country.
• Sense of Accomplishment: Working to meet the needs of dependents and contributing to the larger good provides a sense of accomplishment and responsibility.

Recognizing the profound importance of work, Mahatma Gandhi insisted on an education and training system that integrated various forms of work, including crafts, to build character and skills.

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The Importance of Studying Employment

Studying the working population of a country provides critical insights and helps in various aspects of national planning and social analysis:

• Human Resource Planning: It helps in understanding the quality and nature of employment, which is essential for planning and managing the nation's human resources.
• Economic Analysis: It allows us to analyse the contribution of different industries and sectors (like agriculture, manufacturing, and services) to the national income.
• Addressing Social Issues: Employment data helps in identifying and addressing key social issues such as the exploitation of marginalised sections of society, child labour, and gender disparity in the workforce.

Workers, Employment, and Participation

Defining a Worker and Economic Activities

To understand employment, we first need to define what constitutes work. Any activity that contributes to the Gross National Product (GNP) is called an economic activity. The GNP is the total money value of all final goods and services produced in a country in a year, adjusted for net earnings from foreign transactions (exports minus imports).

A worker is defined as any individual engaged in an economic activity, regardless of their capacity or status. This definition is broad and includes:

• People who are temporarily absent from work due to illness, injury, bad weather, or social functions.
• Individuals who assist the main workers in these activities.
• Not just those paid by an employer (hired workers), but also those who are self-employed.

The nature of employment in India is multifaceted, with some people having year-round employment while others work for only a few months a year.

India's Workforce: A Snapshot (2017-18)

• Total Workforce: About 471 million.
• Rural-Urban Divide: Rural workers constitute about two-thirds of the total workforce, reflecting the large rural population.
• Gender Composition: Men form the majority of the workforce, at about 77%. Women account for about 23% of the total workforce. Women workers make up about one-fourth of the rural workforce but only one-fifth of the urban workforce.

A significant issue is the non-recognition of women's work. Many women engaged in unpaid domestic work (like cooking, fetching water) and farm labour are often not categorised as workers, leading to an underestimation of female participation in the economy.

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Participation of People in Employment: Worker-Population Ratio

The Worker-Population Ratio is a key indicator used to analyse the employment situation in a country. It measures the proportion of the population that is actively contributing to the production of goods and services.

The formula to calculate this ratio is:

$ \text{Worker-Population Ratio} = \frac{\text{Total Number of Workers}}{\text{Total Population}} \times 100 $

A higher ratio indicates a greater engagement of the population in economic activities. Let's look at the data for India.

Sex	Total Ratio (%)	Rural Ratio (%)	Urban Ratio (%)
Men	52.1	51.7	53.0
Women	16.5	17.5	14.2
Total	34.7	35.0	33.9

Analysis of Participation Rates

• Overall Participation: For every 100 people in India, about 35 are workers.
• Rural vs. Urban: The participation rate is slightly higher in rural areas (35%) than in urban areas (33.9%). This is because rural people often have limited resources and lower incomes, compelling more members to work. In urban areas, a larger section of the youth is enrolled in educational institutions, and people may wait for jobs that match their skills.
• Male vs. Female: Male participation (52.1%) is significantly higher than female participation (16.5%). The gender gap is particularly wide in urban areas, where only about 14 out of every 100 women are engaged in economic activities. This is partly due to social norms where families discourage women from working if male members earn a high income, and the non-recognition of unpaid household work.

Types of Workers: Self-Employed, Hired, and Salaried

The status of a worker within an enterprise provides insight into the quality of employment and the worker's level of job security and authority. Workers in India are broadly classified into three categories:

1. Self-Employed Workers

These are workers who own and operate an enterprise to earn their livelihood. Examples include a shop owner, a farmer cultivating their own land, or a freelance professional. This is the largest category in India.

2. Casual Wage Labourers

These workers are casually engaged in others' farms or enterprises and are paid remuneration (wages) for the work done, often on a daily basis. They do not have job security. Construction workers and many agricultural labourers fall into this category.

3. Regular Salaried Employees

These workers are engaged by an enterprise or an individual and are paid wages or a salary on a regular basis. They typically have more job security and may receive social security benefits. A civil engineer in a construction company or a bank cashier are examples.

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Distribution of Employment by Status

The distribution of the workforce across these categories reveals important patterns about the nature of employment in India.

Status	Male Workers (%)	Female Workers (%)
Self-Employed	52	52
Regular Salaried Employees	24	21
Casual Wage Labourers	24	27

Analysis by Gender: Self-employment is the major source of livelihood for both men and women, accounting for 52% of the workforce for both genders. Casual wage work is the second major source, slightly more common for women (27%) than men (24%). The proportion of regular salaried employees is similar for both.

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Status	Rural Workers (%)	Urban Workers (%)
Self-Employed	58	38
Regular Salaried Employees	13	47
Casual Wage Labourers	29	15

Analysis by Region: In rural areas, self-employment (58%) and casual wage labour (29%) are dominant, largely due to the agrarian nature of the economy where many own and cultivate their land. In urban areas, the nature of work is different, with regular salaried jobs (47%) being the largest category, followed by self-employment (38%). Urban enterprises require workers on a more regular basis.

Employment by Sector: Primary, Secondary, and Tertiary

Classification of Economic Activities

For analysis, all economic activities are generally grouped into three major sectors:

1. Primary Sector: Includes agriculture, forestry, fishing, mining, and quarrying. It involves the extraction of natural resources.
2. Secondary Sector: Includes manufacturing, electricity, gas and water supply, and construction. It involves the processing of raw materials into finished goods.
3. Service (or Tertiary) Sector: Includes trade, transport and storage, and other services like banking, IT, and education.

The distribution of the workforce across these sectors indicates the stage of a country's economic development. Typically, as a country develops, labour shifts from the primary sector to the secondary and then to the tertiary sector.

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Distribution of Workforce by Industry (2017-18)

Industrial Sector	Rural (%)	Urban (%)	Men (%)	Female (%)	Total (%)
Primary Sector	59.8	6.6	40.7	57.1	44.6
Secondary Sector	20.4	34.3	26.5	17.7	24.4
Tertiary/Service Sector	19.8	59.1	32.8	25.2	31.0
Total	100.0	100.0	100.0	100.0	100.0

Analysis of Sectoral Distribution

• Overall: The primary sector remains the main source of employment in India, engaging about 44.6% of the workforce. The service sector employs 31%, and the secondary sector employs about 24.4%.
• Rural-Urban Divide: In rural India, nearly 60% of the workforce depends on the primary sector. In sharp contrast, urban employment is dominated by the service sector (59.1%) and the secondary sector (34.3%).
• Gender Disparity: There is a high concentration of women workers in the primary sector (57.1%), whereas a smaller proportion of men (40.7%) work in that sector. Men have a more balanced distribution, with significant opportunities in both the secondary and service sectors.

Growth, Changing Structure of Employment, and Jobless Growth

Jobless Growth

A key objective of India's planned development since independence has been to expand the economy and generate employment. During the period 1950–2010, India's Gross Domestic Product (GDP) grew positively and, for the most part, at a rate higher than employment growth. However, a troubling trend emerged, particularly in the late 1990s.

A widening gap appeared between the growth of GDP and the growth of employment. The economy was able to produce more goods and services without a proportional increase in employment opportunities. This phenomenon is termed jobless growth.

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Structural Changes in Employment (1972-2018)

Development strategies aim to reduce the proportion of the population dependent on agriculture. Over the last five decades, India has witnessed a substantial shift in its employment structure.

Item	1972-73	1983	1993-94	2011-2012	2017-2018
By Sector
Primary	74.3	68.6	64.0	48.9	44.6
Secondary	10.9	11.5	16.0	24.3	24.4
Services	14.8	16.9	20.0	26.8	31.0
By Status
Self-employed	61.4	57.3	54.6	52.0	52.2
Regular Salaried Employees	15.4	13.8	13.6	18.0	22.8
Casual Wage Labourers	23.2	28.9	31.8	30.0	25.0

Shift from Farm to Non-Farm Work

The share of the workforce engaged in the primary sector declined significantly from about 74% in 1972-73 to about 45% in 2017-18. Correspondingly, the shares of the secondary sector (from 11% to 24%) and the service sector (from 15% to 31%) have increased, indicating a structural transformation in the economy.

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Casualisation of the Workforce

Looking at the employment status, a significant trend observed, particularly between 1972 and 1994, was the process of people moving from self-employment and regular salaried employment towards casual wage work. This is known as the casualisation of the workforce. This trend makes workers highly vulnerable as casual work lacks job security, regular income, and social benefits.

However, the more recent data for 2011-2018 shows a decrease in the share of casual wage labourers and a moderate rise in the share of regular salaried employees, alongside a stagnation in the secondary sector. This suggests a complex and evolving employment landscape that requires further analysis.

Informalisation of the Indian Workforce

Formal vs. Informal Sectors

To understand the quality of employment, the workforce is classified into two categories: formal (or organised) and informal (or unorganised).

• Formal Sector: This includes all public sector establishments and those private sector establishments that employ 10 or more hired workers. Workers in this sector are called formal sector workers.
• Informal Sector: This includes all other enterprises and workers. It is a vast category that comprises millions of farmers, agricultural labourers, owners of small enterprises, and the self-employed who do not have any hired workers. Non-farm casual wage labourers like construction workers also fall into this sector.

Workers in the formal sector generally enjoy job security, higher earnings, and social security benefits like provident fund, gratuity, and pension. In contrast, workers in the informal sector lack these protections. They do not have regular income, are not protected by labour laws, can be dismissed without compensation, and often work with outdated technology.

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The Dominance of the Informal Sector

Developmental planning in India envisaged a shift of workers from the informal to the formal sector as the economy grew. However, the reality has been quite different.

As of 2011-12, out of a total workforce of 473 million, only about 30 million were in the formal sector. This means that a staggering 94% of the Indian workforce is in the informal sector, while only 6% is in the formal sector.

Sector	Male Workers	Female Workers
Formal Sector	24	6
Informal Sector	310	133

The data also shows that a larger proportion of women are in the informal sector. Owing to the efforts of the International Labour Organisation (ILO), the Indian government has initiated measures for the modernisation of informal enterprises and the provision of social security for informal sector workers.

Unemployment: Types and Measurement

Defining Unemployment

The National Statistical Office (NSO) defines unemployment as a situation in which all those who, owing to a lack of work, are not working but are seeking work or are available for work under the prevailing conditions and remunerations. An unemployed person is formally defined by economists as someone who is not able to get employment of even one hour in half a day.

Data on unemployment is collected from three main sources: Reports of the Census of India, NSO's Reports on Employment and Unemployment, and data from Employment Exchanges.

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Types of Unemployment in India

Several types of unemployment are prevalent in the Indian economy:

1. Open Unemployment

This is a situation where a person is willing and able to work but cannot find any work. They are openly unemployed and actively looking for jobs.

2. Disguised Unemployment

This type of unemployment is common in Indian agriculture. It occurs when more people are employed in a job than are actually required. For example, if a four-acre farm needs only three workers to operate efficiently, but five family members are working on it, then the two extra workers are disguisedly unemployed. Their removal would not affect the total output. Studies in the 1950s suggested that about one-third of agricultural workers in India were disguisedly unemployed.

3. Seasonal Unemployment

This occurs because work in certain sectors, especially agriculture, is seasonal. There are busy seasons for sowing and harvesting, but for the rest of the year, there may be no work available in the villages. During the off-season, people may migrate to urban areas in search of temporary jobs. This is a common form of unemployment in rural India.

It is important to note that due to desperate economic conditions, people in India often cannot afford to remain completely unemployed for long. They are often forced to accept unpleasant, low-paying, or dangerous jobs just to survive.

Government and Employment Generation

Government's Role in Creating Employment

Since independence, both the Union and State governments have played a crucial role in employment generation. Their efforts can be categorized as direct and indirect.

Direct Employment Generation

The government directly employs people in various departments for administrative purposes. It also runs industries, hotels, and transport companies, providing direct employment to a large number of workers. Government projects like the construction of dams, roads, and other infrastructure also directly employ workers.

Indirect Employment Generation

When government-owned enterprises increase their output of goods and services, it stimulates private enterprises that depend on them. For example, when a government steel company increases its output, private companies that buy this steel to manufacture other products will also increase their output, leading to an indirect increase in employment opportunities in the private sector.

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Employment Generation Programmes

Many government programmes aimed at alleviating poverty do so through employment generation. These programmes not only provide jobs but also aim to create durable community assets and improve the quality of life.

A landmark initiative is the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005. This Act promises 100 days of guaranteed wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work.

Other programmes focus on providing services like primary health and education, rural drinking water, and assistance for people to acquire income-generating assets, all of which contribute to creating employment.

Conclusion: The Changing Nature of Work

The structure of the Indian workforce has undergone significant changes. There is a clear shift towards the service sector, where most newly emerging jobs are found. The advent of high technology and the expansion of the service sector have created opportunities for small-scale enterprises and specialist individuals to thrive alongside multinational corporations.

Practices like outsourcing are becoming common, where large firms hand over specialist tasks (like IT services or customer support) to smaller enterprises, sometimes located in other countries. This has altered the traditional notion of a workplace, with the home increasingly becoming the new office for many.

However, these changes have not always been favourable to the individual worker. Key challenges in the current employment landscape include:

• Informalisation: The nature of employment has become more informal, with limited job security and social security benefits available to the majority of workers.
• Jobless Growth: The last few decades have seen rapid GDP growth without a corresponding increase in employment opportunities.

These challenges have compelled the government to take active initiatives in generating employment, particularly in rural areas, to ensure that the benefits of economic growth are shared more equitably.

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