When data faces reality

The employment reality is grimmer than what the household survey data tell us. This is true for Chhattisgarh as much as it is for Uttar Pradesh. And, also for other states

A Member of the Legislative Assembly of Chhattisgarh called recently asking me to clarify on an apparent contradiction in what CMIE’s unemployment data tell and the reality he saw in his state. According to CMIE’s Consumer Pyramids Household Survey (CPHS) data, the unemployment rate in Chhattisgarh was less than a per cent. But, he saw hundreds of thousands of people applying for just few jobs in the state. The latter, the MLA argued quite reasonably, should be a reflection of high unemployment but CMIE says that Chhattisgarh had negligible unemployment. How could both be true, he wondered. 

That same reality was played out again when on October 16 the media showed pictures of railway stations and bus stands in Uttar Pradesh packed with candidates for the Uttar Pradesh Subordinate Selection Commission Preliminary Eligibility Test. Around 3.8 million candidates were criss-crossing the state because rules did not permit them to take the exams in their place of residence. That’s what created the spectacle. But, it also provided a visual image of the desperation of young India to find a government job. This particular exam does not give a job; it merely gives candidates a score to apply for Group C state government jobs. 

But Uttar Pradesh, like Chhattisgarh, also has a very low unemployment rate according to the CMIE data. Its unemployment rate is around 3-4 per cent when the national average is around 7-8 per cent.

Now, how does one explain this conundrum? The first point to clarify is that government jobs are not sought only by the unemployed. Even a person who is already employed in a non-government job can seek a government job. This is so because of two reasons. First, most private sector jobs are informal employment arrangements in the unorganised sector where employment is neither well-paying nor assured like government jobs are. Second, private sector jobs are not considered safe jobs. They carry the risk of being laid off easily. Therefore, even a person with a private sector job would seek a government job if the person still has a chance of getting one.

A second point is that a person may state that she is not a part of the labour force in the sense that she is neither actively looking for work nor is willing to work at the time of the interview but, she may still apply for a government job because such a job will become available only a few years in the future when she may be willing to be employed if she gets a government job. It is possible that many applicants are still students. CMIE’s CPHS provides us with an estimate of the number of students who are willing to work and are actively looking for employment. In Uttar Pradesh, about three-fourths of the unemployed are those who also declare themselves to be students. Interestingly, the PLFS system of data capture cannot classify a person as both a student and an unemployed person simultaneously. But, as CMIE’s CPHS shows it is possible that students are active job seekers. Possibly, they remain students till they cannot find a job. The PLFS does not capture this phenomenon.

There is another phenomenon in the Indian labour markets. Many are willing to be employed only if they get a government job and are not willing to work otherwise. They will apply for these government jobs but will declare themselves to be out of the labour force.

Compare the 3.8 million applicants for the UP preliminary eligibility tests with the number of unemployed in the state. According to CMIE’s CPHS there were only 1.9 million unemployed in the state during January-August 2022. But, twice as many applied for the eligibility test. 

The number of unemployed in UP is higher according to the official PLFS. The unemployment rate according to this in UP in 2020-21 (July 2020 through June 2021) was 4.2 per cent which is lower than the CPHS estimate of 5.8 per cent for the same period.  The PLFS estimates a higher labour force participation rate (LPR) of 50.1 per cent compared to CPHS’s 35.8 per cent. The 50.1 per cent LPR on an estimated population of 125.3 million (PLFS) yields a labour force of 62.8 million.  And a 4.2 per cent unemployment rate on this labour force provides an estimate of 2.6 million unemployed. But, even this is lower than the 3.8 million applicants seeking jobs through the UP preliminary eligibility tests.

The extraordinary rush for government jobs in UP can also be explained partly by the fact that the state offers relatively fewer salaried jobs. During January – August 2022, only about 14 per cent of the jobs were of salaried employees. Two thirds of the employment is in the form of farmers or daily wage labourers. The rest are business persons. At the all-India level, about 21 per cent of the employment is of salaried employees. Salaried jobs are scarcer in UP and that explains the greater rush for them.

A picture is worth more than a thousand words. The pictures and the stories behind those pictures of millions of UP-ites straining every muscle to cross a hurdle to get those scarce jobs tells us a lot more than the dry statistics from CPHS or PLFS. CPHS tells us that there are 1.9 million unemployed in Uttar Pradesh. PLFS tells us there are 2.6 million. But, those pictures tell us the stories of 3.8 million who are desperate to get good quality jobs. The employment reality is grimmer than what the household survey data tell us. This is true for Chhattisgarh as much as it is for UP. And, also for other states.