Indian workforce smaller than pre-pandemic days, but quality of jobs better

• Salaried jobs, which are amongst the more well-paying jobs, are the silver lining in an otherwise deteriorating employment market, CMIE data shows.
  
• Even amongst salaried jobs – those created by listed companies came in at 0.7 million in 2021-22, offering up to three-times higher salaries than other salaried jobs.
  
• A rise in industrial jobs, and a decline in agricultural and personal service jobs is another good indicator, say analysts.
  

The Indian workforce is smaller than pre-pandemic days, but the quality of jobs has gotten better, according to a new survey by the Centre for Monitoring Indian Economy (CMIE).

According to the latest CMIE report, salaried jobs, which are amongst the more well-paying jobs, are the silver lining in an otherwise deteriorating employment market.

The report states that 8.5 million salaried jobs were added in September-October 2022. Overall, salaried jobs stood at 86 million in September, and 84.7 million in October – the highest in any month since the beginning of the Covid-19 pandemic.

Smaller, but better paid workforce

More interestingly, it’s the jobs created by listed companies that offer the most comfort, according to Mahesh Vyas, managing director and CEO of CMIE.

According to Vyas, salaries in listed companies are nearly three-fold higher than other salaried jobs – the average salaries in listed companies in 2021-22 stood at ₹7.14 lakh per annum, when compared to ₹2.63 lakh per annum across all salaried jobs.

“This is way ahead of wages in other forms of employment. For example, a business person made ₹1,34,323 per annum and small traders and daily wage labourers made about ₹1,17,053 per annum. Farmers made even less,” Vyas said.

Agriculture, personal service jobs decline – but that’s a good thing, says Credit Suisse

Employment metrics appear to have deteriorated when the overall numbers are taken into account, with the labour participation rate falling from 39.3% in September to 39% in October. The rate of unemployment also rose from 6.4% to 7.8%.

However, CMIE notes that it has seen a rise in industrial jobs when compared to the pre-Covid levels seen in October 2019.

“The drop in agricultural employment should be seen positively, given that it usually means hidden unemployment. Further, the decline in service jobs is mostly in personal services, which are also generally low in value-addition,” said a report by Credit Suisse.

Rural recovery underway, says Morgan Stanley, but caution needed

While a bulk of the salaried jobs – 63% of them – came from the urban markets in 2021-22, analysts at Morgan Stanley say that a rural recovery is underway, too.

Four key indicators – employment, credit offtake, auto sales and trade, are all set for a rebound, the research firm noted.

“We believe rural demand is set to rebound, helped by wider reopening, improving labour market conditions, and improving terms of trade for the rural sector,” the report said.

Credit Suisse adds that the demand for jobs under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is also the lowest since the beginning of Covid-19.

However, on a cautionary note, CMIE says that daily wage labourers and small traders lost 11.8 million jobs in September-October 2022 – most of these jobs are in rural India.

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