A disconcerting picture behind the headline numbers (Source The Hindu, PIB GS-3, Economics)

03 Aug A disconcerting picture behind the headline numbers (Source The Hindu, PIB GS-3, Economics)

Posted at 03 Aug 2021 in Current Affairs, Economy, GS Paper III by Swarn Singh 0 Comments

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Context:-

The Periodic Labour Force Survey (PLFS) data’s third annual round was released, which was conducted during July 2019- June 2020. We shall discuss the findings and how we can further improve the data.

What is the Periodic Labour Force Survey (PLFS)?

- The National Statistical Office (NSO) which lies under the Ministry of Statistics & Programme Implementation launched this survey.

The PLFS captures key indicators:-

- - Labour market which includes the labour force participation rate (LFPR)
  - Worker population ratio (WPR)
  - Unemployment rate (UR)

What is the Labour market such as the labour force participation rate (LFPR)?

- - The labour force participation rate or LFPR is a measure of the percentage of a country’s working-age population that engages actively in the labour market either by working or looking for work
  - It also provides an indication of the size of the supply of available labour which can be engaged in the production of goods and services, relative to the population at working age.
  - LFPR(%) = Persons employed + persons unemployed x 100. Working-age population

What is the Worker population ratio (WPR)?

- - It is defined as the percentage of employed persons in the total population.

What is the Unemployment rate (UR)?

- The unemployment rate (UR) is defined as the percentage of persons unemployed among the persons in the labour force.
Activity Status:-
- Usual Status:-The activity status of a person is determined on the basis of the activities pursued by the person during the specified reference period. When the activity status is determined on the basis of the reference period of last 365 days preceding the date of survey, it is known as the usual activity status of the person.
- Current Weekly Status (CWS): The activity status determined on the basis of a reference period of last 7 days preceding the date of survey is known as the current weekly status (CWS) of the person.

Findings of Survey PLFS 2019-20:-

- Our labour market is in distress followed by dwindling GDP growth and a lockdown due to the coronavirus pandemic .
- There is a decline in the unemployment rate to 4.8% in 2019-20 which is the lowest in three years.
- According to usual status, data shows a fall from 6.1% in 2017-18 to 4.8% in 2019-20.
- LFPR has increased from 36.9% to 40.1% along with WPR increased from 34.7% to 38.2% during the same period.
  - So we can say that there was an increase in the share of the population in the labour force over the last three years along with a higher increase in the share of those who were able to find work so unemployment fell.
- The quarterly GDP growth rate has declined for successive quarters i.e. sliding from 8.2% in January- March 2018 to 3.1% in January-March 2020.

Now the question is: How were more people able to find jobs even though economic activities were slowing down?

- - Here is the answer i.e. changing composition of the workforce.
  - If we look on to the data between 2018 and 2019 our workforce will increase by 2.9%.
  - The percentage of the working population in all other employment categories in the workforce declined except unpaid family helpers.
  - Whatever rise was in the workforce, It was accommodated by agriculture.
  - Agriculture is performing as a function of a sink i.e absorbing the workforce that cannot find remunerative employment elsewhere.

The gender dimension of survey:-

- - - Women dominate the category of unpaid family workers, here the declining unemployment rate can largely be explained by a movement of women from primarily being engaged in domestic work to agriculture and other petty production activities because of a hope of increasing family income in the times of unprecedented distress and lack of alternative employment opportunities.

Impact of the lockdown

- The current weekly status unemployment rate or CWSUR in this quarter was 14%, and the urban unemployment rate was around 20%.
- The monthly earnings of the self-employed workers have declined by 16%.
- The daily wage for casual workers monthly earnings have declined by 5.6% over the same period.
- The real monthly per capita consumer expenditure has declined by 7.6%.
- Private final consumption expenditure has declined by 26.7% in April-June 2020 over the same quarter in 2019.

How to strengthen the data?