Why it is important to create jobs, not merely count employment numbers

While jobs mean employment in the organized set-up, 'employment' by itself could include working on own farms or as daily labourers or even hawking bananas at a bus station

Last week, the labour ministry released data on employment in the organised sector during the quarter ended March 2017. Effectively, this also makes available estimates of employment created in the organised sector during fiscal 2016-17. These estimates are made from the Labour Bureau's Quarterly Employment Survey of selected sectors. The sectors covered by the QES include units that employ 10 persons or more in the manufacturing, construction, trade, transport, hotels and restaurants, IT/BPO, education and health industries. The survey is conducted on a sample of about 11,000 units and population estimates are derived using appropriate weights.
 
According to this, 20.5 million persons were employed in the above as of March 2016. Over a year, 0.42 million jobs were added. This takes the total to 20.9 million people employed as of March 2017 in the organised part of the eight sectors covered by the QES.
 
To place this 20.9 million in perspective, note that the total employment in the country is over 400 million. According to the BSE-CMIE household survey, 405 million persons were employed in March 2017. So, the estimates presented by the QES account for about five per cent of the total employment in the country. The BSE-CMIE effort covers all kinds of employment including unorganised sector and even self-employed persons.
 
Although the scope of QES is limited, it covers the more important kind of employment. This is employment in the organised sector -- the kind of jobs that many people aspire for. These jobs grew by about 2 per cent in the year. They need to grow faster to absorb people from the unorganised sectors where productivity is low and social security is absent.
 
While the QES covers jobs in the organised sector, it does not include government jobs, which are the kind of jobs that people aspire for over any other kind of job including private jobs or self-employment.
 
Central government employed 3.5 million persons as of 2016-17. Data on employment in state governments, quasi government bodies and local government bodies are not available for recent years. The last such estimate is available for 2011-12. At that time, central government employment accounted for less than 15 per cent of total government employment. Assuming a similar proportion, total government employment could be of the order of 23 million today, a good 10 per cent higher than the estimated employment in the organised non-government sectors.
 
It should be easy for the government to publish information on total employment in all arms of the government. While the Labour Bureau's Quarterly Employment Survey is based on a sample survey and will therefore have a margin of error, government employment data will be based on official records and will therefore be a lot more reliable. Given that government is the most preferred employment and the largest provider of employment, it will be particularly useful if the government makes a concerted effort to release such information every month. It will be a useful complement to the QES – currently the only official fast-frequency measure of employment available in India.
 
Many readers could scoff at the continued importance of government jobs, a generation after liberalisation in the early 1990s. But, this is reality and millennials of small-town India continue to repose faith in a sarkari job.
 
Governments respond to these aspirations in their own way. A full-page newspaper advertisement last Sunday by the Jharkhand government says that the state provided employment to 1.65 million in the past three years. At first, it appears that the state government was claiming that it provided the jobs. This is of course, not true. The employment was not by the state and these were not necessarily government or other formal jobs.
 
Governments and the organised private sector provide jobs. The rest is employment by fending for your own self and can hardly be called a proper job although it is counted as employment.
 
I cannot decide whether the Jharkhand government's claims are impressive or incredulous. The latest Statistical Profile available is for 2006 that provides employment data till the year ended March 2005.
 
According to the BSE-CMIE effort at measuring employment-unemployment, 9.6 million persons were employed in Jharkhand during January-April 2016. This grew to 10.1 million in May-August 2017. The increase of 0.5 million employed in a little over a year does not imply increase in jobs. Most of them found employment, but did not necessarily find jobs. Employment includes working on own farms or as daily labourers or hawking bananas at a bus station.
 
It is important that we create jobs in the organised sector. It is equally important that we build credible statistical systems to measure and monitor our greatest challenge today – of jobs.
 
It is good that the Labour Bureau continues to produce the QES although the Task Force on Improving Employment Data had severely criticised this effort. It will be good if the government released data on its own record at creating jobs.

The author is managing director and CEO, Centre for Monitoring Indian Economy P Ltd

 

 

 

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Methodology

Consumer sentiment indices and unemployment rate are generated from CMIE's Consumer Pyramids survey machinery. The weekly estimates are based on a sample size of about 6,500 households and about 17,000 individuals who are more than 14 years of age. The sample changes every week but repeats after 16 weeks with a scheduled replenishment and enhancement every year. The overall sample size run over a wave of 16 weeks is 158,624 households. The sample design is of multi-stratrification to select primary sampling units and simple random selection of the ultimate sampling units, which are the households.

The Consumer Sentiment index is based on responses to five questions on the lines of the Surveys of Consumers conducted by University of Michigan in the US. The five questions seek a household's views on its well-being compared to a year earlier, its expectation of its well-being a year later, its view regarding the economic conditions in the coming one year, its view regarding the general trend of the economy over the next five years, and finally its view whether this is a good time to buy consumer durables.

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