Recent data from the Employees’ Provident Fund Organisation (EPFO) reveals a 10.1% decline in new subscribers during the first half of the fiscal year 2023-24, indicating a slowdown in formal job creation. This downturn is significant in light of the continuous rise in self-employment, prompting concerns about the informal nature of job growth in the Indian economy.
Young Workforce Hit: Decline in 18-28 Age Group Subscribers
- One concerning trend is the 9.54% reduction in subscribers aged 18-28, a demographic typically associated with first-time entrants into the job market.
- This decline hints at challenges in sustaining a robust labor market, raising questions about the overall health of employment opportunities for young individuals.
Technology Sector Struggles: Impact on Formal Workforce
- The technology and knowledge sector, comprising a substantial portion of the formal workforce, is grappling with rationalizing its workforce due to declining revenues amid muted demand.
- The repercussions include a considerable impact on hiring practices, with some candidates delaying their entry into firms even after receiving placement offers.
Gender Disparities: Decrease in Women Subscribers
- The data also reveals an 11.1% decrease in the number of women subscribers. This decline underscores the difficulties faced by women in accessing formal employment, particularly as some firms insist on in-office work.
- The gender gap in formal job opportunities remains a significant challenge in the current job market scenario.
Recovery Challenges: Pace of Formal Job Creation Lagging Behind Labor Force Growth
- Labor economist Santosh Mehrotra emphasizes that the labor markets are yet to recover fully.
- The slow pace of formal job creation fails to keep up with the growing labor force, resulting in increased self-employment and engagement in agriculture, especially among the youth and women.
Contrasting Data: PLFS Survey Highlights Agricultural Dominance and Manufacturing Decline
- While the EPFO data signals a decline in formal job creation, the recent Periodic Labour Force Survey (PLFS) by the National Statistical Office (NSO) paints a contrasting picture.
- The PLFS reports a six-year low in the unemployment rate but also highlights an increase in the share of people engaged in agriculture.
- This shift suggests that more people are entering the labor market, yet the economy struggles to generate sufficient quality jobs.