Context

• The contraction of the economy raises concern on the employment situation as the shrinking sectors are those that create the maximum new jobs. 
• While the ‘Garib Kalyan Rojgar Abhiyan’ launched recently could be an immediate relief, the ₹50,000-crore employment scheme cannot be a substitute for decent urban jobs. 

Economy and employment

• Recent data on the contraction of the economy raises concern on the employment situation in India. 
• The shrinking sectors that have been affected the most — construction (–50%), trade, hotels and other services (–47%), manufacturing (–39%), and mining (–23%) are those that create the maximum new jobs in the economy. 

Consequences

• It would lead to either a growing number of people losing jobs or failing to get one, or even both which means there is a possibility of a decline in employment and a subsequent rise in unemployment. 

Vulnerable employment

• Vulnerable employment is characterised by inadequate earnings, low productivity and difficult conditions of work that undermine the basic rights of workers. 
• They are more likely to be informally employed and lack effective representation by trade unions. 
• According to the International Labour Organization, of the 535 million labour force in India in 2019, some 398.6 million will have poor quality jobs.
• The abrupt announcement of the lockdown exposed the severe vulnerabilities of urban low-end informal jobs as the share of vulnerable employment is higher in India than that of the world or the South Asia region. 

Challenges to be addressed

• There are two challenges policy interventions in securing the livelihoods of workers in urban areas have to address: 
  • First, to generate more jobs 
  • Second, to reduce vulnerabilities by providing decent wages and some form of job security.

Way forward

• The present crisis calls for a multi-pronged strategy to tackle the issue of urban jobs.

Coordination with local government

• Given the scale of urbanisation, the focus on urban employment generation programmes should be in coordination with local governments
  • This will require actors at the local level to have more resources at their disposal.
  • Resource mobilisation could be enabled by the formation of local alliances, involving elected representatives, trade unions, entrepreneurs and community groups
  • This can also be the key to solving other problems faced by cities.

Implement employment-intensive investment policies

• A major local initiative would be to design and implement employment-intensive investment policies which should embrace the initiatives of both private entrepreneurs as well as by the government. 
  • Private investments need to be facilitated by conducive contractual relations between labour and capital. 
  • Enterprise formation needs to be an integral part of the strategy, with converging interests for workers and entrepreneurs on issues related to technology and productivity enhancement.
  • Small and micro enterprises should be given extra support to balance the interests between labour and capital as neither have collective bargaining powers. 

Prioritise urban infrastructure

• Urban infrastructure should be prioritised as it accounts for a large share of total investments in the local economy.
  • A labour-intensive approach to building municipal infrastructure can be a cost-effective alternative to capital intensive-approach as wage rates are low. 
  • Infrastructure investments would spur employment, generate earnings and contribute to small enterprise formation. 
  • As per an ILO document, construction of low-cost housing is another activity that can be carried out using labour-intensive methods.

Launch of urban employment scheme

• An immediate launch of an urban employment scheme oriented toward building large-scale medical, health and sanitation infrastructure in cities and towns across India can be another step.
• MGNREGA can be expanded by both increasing the budgetary allocations and the guaranteed minimum number of days of work. 

Conclusion

• Given the structure of the economy and demographic profile, it is important to focus on reducing the vulnerabilities of urban informal jobs in the long run.

Reference:

1. https://www.thehindu.com/opinion/op-ed/urban-employment-as-the-focal-point/article32604143.ece