Measuring Unemployment
The Periodic Labour Force Survey (PLFS) for 2021-22 revealed an unemployment rate of 4.1% in India, shedding light on the complexities and nuances of measuring and understanding unemployment rates across various nations.
Unemployment Defined
What Does Unemployment Mean?
- Criteria by International Labour Organization (ILO):
- Currently out of a job.
- Readily available for work.
- Actively searching for employment.
- Key Distinction: Not being in an active job search does not equate to being unemployed.
Understanding the Labour Force
- Comprising of: Employed and unemployed individuals.
- Those Not Considered: Students, individuals engaged in unpaid domestic tasks, and similar categories.
Comparative Analysis: Unemployment Statistics
- PLFS 2017:
- India recorded a historically high unemployment rate of 6.1%.
- PLFS 2021-22:
- Current rate stands at 4.1%.
- U.S. Rates:
- As of July 2022: 3.5%.
- As of July 2023: 3.7%.
Calculation and Influencing Factors
- Determining the Unemployment Rate: It’s essentially the ratio of the unemployed population to the entire labour force.
- Driving Forces:
- The capacity of an economy to create jobs.
- Individuals choosing not to seek employment.
Variances in Developed and Developing Economies
Cultural and Social Factors
- India as a Case Study:
- NSSO Survey 2009-10 highlighted a significant percentage of women preferring domestic roles over employment.
- Labour Force Participation Rate (LFPR) for rural women was recorded at 26.5%.
- Challenges:
- Informal nature of jobs complicates accurate measurement.
- Different methods, such as UPSS and CWS, employed by NSSO can yield varying results.
CMIE’s Method
- Bases its metrics on the previous day’s employment status, which can potentially indicate a higher unemployment rate and a decreased LFPR.
Developing vs. Developed Nations
- In developing countries, job regularity is less consistent compared to developed countries.
Impact of Lockdown on Employment
Overview
- March 2020: The lockdown due to the pandemic caused significant disruptions in India’s economy.
- PLFS Data: Covered the period up to June for both 2019-20 and 2020-21, shedding light on the lockdown’s immediate and subsequent impacts.
The Lockdown Scenario
- Individuals with regular employment before the lockdown faced job losses in March 2020.
- Employment statistics showed variations, with a spike during the lockdown and a reduction thereafter, particularly in urban areas as per CWS rates.
The Political Angle
- With elections looming, there’s a heightened focus on understanding and addressing unemployment issues.
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