Engines of employment: Large cities create more opportunities

The first PLFS report on million-plus cities highlights stronger urban employment and wages but reveals wide disparities in female participation and manufacturing pay

The first Periodic Labour Force Survey (PLFS)-based report on labour-market dynamics in million-plus cities offers a detailed comparison of selected labour-market indicators for 46 cities whose population, based on Census 2011, was above one million. The report, brought out by the Ministry of Statistics and Programme Implementation, shows that million-plus cities performed better than overall urban India on several indicators, with a labour-force participation rate of 52.4 per cent, an unemployment rate of 4.9 per cent, and a higher share of regular wage or salaried jobs (58.5 per cent). Workers also earn more across all employment categories. The gains are pronounced particularly for women. Self-employed women in million-plus cities earn about 58 per cent more than overall urban India, while female casual labourers receive 18 per cent higher daily wages. The share of the youth aged 15-29 years who are not in employment, education, or training is lower at 22.2 per cent, compared with 25 per cent in urban India, reflecting relatively good access to education and employment opportunities.

 

Yet city-level disparities are stark: Cities in Gujarat such as Surat, Ahmedabad and Rajkot report low unemployment below 1.5 per cent, whereas Patna (20.9 per cent), Dhanbad (15 per cent) and Srinagar (11.7 per cent) lag behind. Female labour-force participation is only 15.5 per cent in Delhi, 15.1 per cent in Faridabad, and 14.8 per cent in Patna. The survey identifies child care or personal commitments in home-making as the primary reason women remain outside the labour force, highlighting the need for expanding affordable child care, and ensuring workplace flexibility for improving women participation.

 

Another important finding is low wages in manufacturing. Million-plus cities where manufacturing accounts for a larger share of employment tend to pay lower hourly wages to salaried workers. For instance, Ludhiana and Surat, where manufacturing contributes over 50 per cent of total employment, are among the lowest-paying cities for salaried workers in hourly terms. Faridabad and Agra — both major hubs of manufacturing and micro, small and medium enterprises — also feature near the bottom of the wage distribution. In contrast, Navi Mumbai, where manufacturing accounts for only about 13 per cent of employment, records the highest hourly wage rate among million-plus cities. Even Prayagraj and Patna, which have relatively small manufacturing bases, report higher hourly earnings for salaried workers than traditional manufacturing centres. This may be an indication of low-skill manufacturing, along with higher value added in the services sector. However, India needs a large number of manufacturing jobs to pull people out of agriculture.

 

It is worth noting that the jobs data must be interpreted with caution. The PLFS follows both the “usual status” and “current weekly status” approaches. Under  the latter, employment for at least one hour during the reference week qualifies a person as employed. This methodology may mask classifying workers engaged in sporadic or poorly remunerated work as employed. Be that as it may, bridging the disparity requires more nuanced policy interventions. Both Union and state governments need to push growth in lagging states/cities through physical investment and skill development. There is also a need to support internal migration to more vibrant cities with an enabling political and economic environment.