In Quest of Decent Work: Employment Quality in India

1. Introduction

The labour market in India is undergoing a transition over the last three decades. While structural adjustment since the 1990s expanded the labour market, especially during the first few years of the new century, most of the new jobs were casual in nature. Thereafter, the story has been mostly that of a jobless growth, even job-loss growth in the 2011-2021 decade. Though the labour market is showing trepid signs of recovery in the more recent times, whether that lasts is doubtful. Along with quantitative pressure on the employment situation, India has been plagued by low quality of employment too. As a signatory to ILO conventions, India had ushered in several enabling regulations during the past century to address the issues of working conditions, minimum wages, and collective bargaining. In spite of that, India’s record in terms of quality of jobs has remained circumspect. Over time, it has evolved and has been called by many names, from classic Disguised Unemployment (a la Joan Robinson) to Non-employment (Mathur, 1999) to (In)Decent Jobs. The problem essentially has remained the same – a plethora of jobs at the lowest rungs of the occupation spectrum – jobs that are irregular, low paying, requires little or no skill, without any social security or old-age benefits, and often in poor and hazardous working conditions. At the start of this century, ILO had declared that “the primary goal of ILO is not only the creation of jobs, but creation of jobs of acceptable quality. The quantity of employment cannot be divorced from its quality” (ILO, 1999) and had set ‘Decent Work for All’ as its goal. In this paper, we have explored the situation in India in terms of employment quality and decent work deficit using NSS and PLFS data over the last two decades. While the foundation is ILO’s decent work framework (Anker et al, 2002), we have expanded and modified that to some extent to suit the available database in Indian context. Apart from aggregate situation, we have examined the pattern and trend across region, gender, social group and education.

We have considered seven factors which have influence on employment quality – Nature of employment, Regularity of employment, Sector of work, Occupation type, Wage level, Presence of Job Contract, and, Social Security Benefits (like Provident Fund, Gratuity, Pension etc). Using these components we have created an Employment Quality Index (EQI) and used that to assess the qualitative aspect of employment situation in India. Our understanding is that employment quality improves if the job type changes from irregular to regular employment, primary to tertiary sector, unpaid labour to regular salaried worker, blue collar to white collar occupations, low wages to high wages, and existence of Job contracts and Social Security benefits. Based on the final EQI score, we have divided the workforce in to four groups. From best to worst, these are – Decent Employment; Moderately good employment; Vulnerable Employment; and, Precarious Employment. Proportion of workers in the last two groups would be an indicator of Decent Work Deficit in the country.

Our results show that Employment Quality is low in India with more than three-fourth of the workers in the country are suffering from Decent Work Deficit while less than one-tenth are in the Decent employment category. There are wide variations across gender, caste, location and region. Females, in rural areas, from Scheduled Tribe households are at the extreme bottom while the situation is better for urban males from general caste background. Many of the largest and most populated states of the country show poor employment quality, which, as a result, is bringing down the national average. In fact, more than 80 per cent of all employments in these states suffer from Decent Work Deficit. The only silver lining is that the situation shows mild signs of improvement during the 2011-23 period after a slump during 1999-2011 period as the EQI has increased and the proportion of workers in the two bottom-most groups have come down. The paper probes these issues further.

2. Background and Current Literature

The idea of ‘decent Work’ as understood today had its origin long back, in the founding proclamations and articles of ILO wherein it talked of minimum wages, hours of work, benefits & protection for women workers, and child labour (ILO, 1919). This was followed by the Philadelphia declaration of ILO in 1944 where it was asserted and recorded that “labour is not a commodity” (ILO, 1944). Subsequently, the United Nations came out with the Universal Declaration of Human Rights which proclaimed that:

“…….(everyone) has the right to…work, to free choice of employment, to just and favourable conditions of work…protection against unemployment…equal pay for equal work… just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection….

[Article 23, UDHR (UN, 1948)]

The issue however came to be discussed with increased regularity during the last decade of the last century when in the aftermath of the downfall of the USSR, the winds of globalisation gained momentum and ‘competitiveness’ became the new buzzword. Workers around the world started to feel the pressure as capitalist employers started to extract as much ‘productivity’ as possible from the workers to remain globally competitive. Over a vast expanse of global south concerns were raised over diluting of standards and regulations related to labour and labourers by governments ever eager to attract and latch on to global capital. This prompted the ILO to come up with the decent Work agenda in 1999 which talked of four broad pillars of decent work – (a) employment & income opportunities; (b) rights at work; (c) social protection & social security; and (d) social dialogue. However, there is no single agreed upon definition or (set of) indicator(s) of decent work even today. The ILO concept & measurable indicators have been criticised by several researchers (Standing, 2008; Burchell et al, 2014; Hauf, 2015 among others) and effort has been made to link it with other broader dimensions of well being, social justice, and sustainable development. Consequently, decent work formed the cornerstone of the ILO’s 2008 declaration on Social Justice for a Fair Globalisation (ILO, 2008) and the Goal 8 of the UN’s Sustainable Development Goals (UN, 2015). Most recently, an effort has been made in Germany to construct the indicators of decent work through a bottom-up approach starting with the trade unions and their concept of Guten Arbeit or good work (Schnucker, 2020). As a result, job quality is no longer seen through the binary of job/no-job or the single lens of monetory return from work, but also through the prism of security, equity, and dignity.

Notwithstanding the complexity of the concept and the multitude of the measurable indicators, the ILO concept or its variation has been used by researchers worldwide to examine employment quality and estimate the extent of decent work deficit across countries and sectors. These include, among others, Berry (2014), Bailey and De Ruyter (2015), Adamson and Roper (2019), Dobbins (2022) for Great Britain; Gil et al (2007) for Brazil; Adhikari et al (2012) for Nepal; and Schmucker (2020) for Germany. In Indian context researchers have focussed mainly on the problems of unorganised sector or informal sector workers in particular (set of essays in Kundu and Sharma, 2001; Hariss-White, 2004; NCEUS, 2006, 2007; Kannan, 2009) and precarity of work in general. Several reports by Labour Bureau, Government of India have explored the working conditions of workers in a plethora of sectors like Construction, Handloom, Brick Kiln, Beedi-making, etc. The specific issue of decent work deficit has remained relatively underexplored, exceptions being Papola (2008), Kantor et al (2005) and Moktan (2016, 2019). Our paper fills the gap in existing literature by examining the trends in employment quality and decent work deficit in India since the turn of this century and exploring the regional pattern of it. Second, we also bring out the disparities across gender, location and social groups so as to identify areas where targeted policies should be taken to bring down decent work deficit in the country. Third, we also attempt to identify the likely factors that determine the employment quality of individuals.

3. Databse & Methodology

While the foundation is ILO’s decent work framework (Anker et al, 2002), we have expanded and modified that to some extent to suit the available database in Indian context. We have used unit level data from the NSS Employment and Unemployment Survey for years 1999-2000, 2011-12 and the PLFS for 2023-24. These are nationally representative large survey datasets providing detailed information about social, demographic, economic, and labour market situation of individuals and households. We have included only those individuals who are either usually employed or currently employed (for details see the documentation of these survey datasets).

We have identified seven domains as the determining factors of quality of employment:

(i) Type of employment – Unpaid Family Labour/Self Employed/Wage Labour/Regular employee

(ii) Regularity of job – Intermittent / Irregular / Regular over the year

(iii) Sector of work – Primary / Personal Services / Secondary / Tertiary

(iv) Occupation type – White collar jobs / Pink Collar jobs / Blue Collar jobs;

(v) Relative Wage level – Distance from Median Wage;

(vi) Job Contract – No contract / Contract for less than 1 year / for 1-3 years / more than 3 years;

(vii) Social Security – No benefit / Any one benefit (Provident Fund/Pension OR Gratuity OR Health/Maternity benefits) / Any two benefits / All three benefits

These are progressively given scores from 0 onwards (See Table A1). For example, under the domain Employment Status score 0 is for Unpaid Labourers, 1 for Self Employeds, 2 for Casual Labourers and 3 for Regular Salaried Workers. In this manner scores for each domain can be computed for each worker depending on their employment status, job type, sector of employment, regularity of occupation, wage rate, job contract, and, social security benefits. Finally, EQI is the simple addition of the scores from each domain.

Maximum score is obtained by adding the highest score in each domain of quality of employment. Thus the maximum score that can be obtained is 20 (person is employed in regular salaried white collar occupation in tertiary sector where the wage rate is more than 1.5 times of median wage level, with a job contract for more than 3 years and enjoying all three social security benefits). Lowest EQI score is 0. Depending on the EQI score we have divided the workforce in to four groups. EQI score between 1 and 5 is ‘Precarious’, between 6 to 10 is ‘Vulnerable’, between 11 to 15 is ‘Moderately good’ and EQI above 13 is ‘Decent’ employment. Proportion of workers in the two bottom-most groups can be taken as a measure of Decent Work Deficit in the country.

4. Results & Discussion

4.1. Overview & Group Variations

If we look at the most recent data (2023-24), we observe that highest share of workers (nearly half of the workforce) are in the Vulnerable employment category (Table 1). The second highest proportion, about one-fourth, belongs to Precarious Employment category. Thus about three-fourth of the workers in the country are suffering from Decent Work Deficit, indicating that their employment, occupation and sector type are at the lower end and they also receive less than the median wage (which comes out to be about Rs. 350 per day at 2023-24 prices). Less than one-fifth of the workers are in Moderately Good employment and less than one-tenth are in the Decent employment category.

Nearly 90 per cent of females are in Precarious or Vulnerable employment and only about 5 per cent in Decent employment (Table 2). For the males these proportions are nearly 70 per cent and less than 10 per cent respectively. The social disparity is also quite evident. While more than 13 per cent of General caste workers are in Decent quality jobs, the figure for STs is only 4 per cent. On other extreme, more than 88 per cent of STs are in Precarious or Vulnerable employment while the figure for general caste is about 62 per cent. For most of the social classes share of Precarious employment has decreased considerably over time.

The disparity is most stark across Rural-Urban location. While close to one-fifth of urban workers have decent quality jobs, just about 3-4 per cent of rural workers have so. Similarly, more than 85 per cent of rural workers are in precarious or vulnerable jobs while 47 per cent of urban workers have so. This rural-urban dualistic nature of the labour market is the most significant and worrisome factor in India at current time.

4.2. Regional Scenario

If we look at the regional situation in terms of employment quality, certain interesting facts emerge. We find that the average EQI score is relatively higher in the predominantly urban UTs like Chandigarh, Delhi, Dadra & Nagar Haveli and Daman and Diu, and also in Goa, Pondicherry, Lakshadweep, Andaman & Nicobar Islands, Mizoram, and Kerala (Table 3). Among the large states, EQI is high in the southern states of Kerala, Karnataka and Tamil Nadu. In the north, while Punjab, Haryana and Uttarakhand are in relatively better situation, conditions in Himachal Pradesh and Uttar Pradesh are less than satisfactory. On other hand, EQI score is below national average in central/eastern states of Bihar, Jharkhand, Chhattisgarh, Madhya Pradesh, Odisha and West Bengal. It is to be noted that some of the largest and most populated states of the country show poor employment quality, which, as a result, is bringing down the national average. In fact, more than 80 per cent of all employments in these states are either precarious or vulnerable in nature, compared to states like Haryana, Kerala, Karnataka, Tamil Nadu and Maharashtra where the figures are less than 70 per cent. This shows that the situation in the country is far from satisfactory in terms of Decent Work.

4.3. Temporal Trends

The only silver lining around this dark cloud is that the situation shows mild signs of improvement during the 2011-23 period after a slump during 1999-2011 period (Table 4, Table 5, Table 6 and Table 7). EQI is increasing and the proportion of workers in the two bottom-most groups have come down. This is mainly due to the increase in the share of ‘Moderate’ quality of jobs. The task for future research would be to explore the factors that bring down Decent Work Deficit in the country and how these can be boosted.

5. What drives Employment Quality?

We have explored the driving factors behind employment quality. At the individual or micro level, it is expected that employment quality would be decided by the education/training level of the person, as also gender, social class, and residence of the individual. At the macro or regional level, we expect that economic condition of the state/UT (per capita income and its growth), average educational level (average years of schooling of 20+ population) would determine the employment quality and magnitude of decent work deficit in the region. In the literature, researchers have also explored the relation between Decent Work and Human Development Index. We examine both these angles using correlation and regression techniques.

5.1. Micro-Factors Determining Employment Quality

We have combined General, Vocational and Technical education level of individuals to create 5 Skill levels (see De et al, 2024 for details). It is expected that higher the skill level of individuals higher will be the chance of getting employed in occupations that provide more stability, regularity, financial & non-financial benefits, which, in this study, is termed as Decent jobs. Our results support this hypothesis as average employment quality score is found to increase with skill level. Workers with lower skill base are mostly engaged in Precarious and Vulnerable employment while people in higher skill categories are mostly engaged in Moderate and Decent employment (Table 8). What is disconcerting is that, though largest share of the Very High skilled people are in decent employment, still a significant proportion (about 15 per cent) suffer from Decent Work Deficit. Further, both average employment score and share of workers in decent jobs have decreased for the High skilled group during the 2011-23 period, after showing an impressive improvement during 1999-2011. Workers with lower skill bases have graduated from Precarious employment to Vulnerable employment category during the two decades, resulting in meagre improvement in average employment quality score for these groups.

To probe factors that determine whether an individual worker is in decent work or not, we have used Logistic Regression where our dependent variable is a binary variable taking values 1 if the worker is in decent work and 0 if not. The explanatory variables are: Completed years of schooling, Location (Rural/Urban), Gender (Male/Female), and Social class (SC/ST/OBC/Others). Results indicate that all the explanatory variables are significant factors in determining employment quality (Table 9). Chances of being in decent job increases with increase in years of schooling, even after controlling for the covariates location, gender, and social class. Urban workers have three times chance of being in decent work compared to rural workers. Females have less than 50 per cent chance of being in decent work compared to males. Workers from social classes other than the General caste also have 15-25 per cent lower chances of being in decent work.

5.2. Macro-Factors Driving Employment Quality

To examine regional drivers of employment quality we have taken States/UTs as observations and examined factors that determine State’s average EQI or Proportion of workers suffering from decent work deficit. We hypothesise that Per capita Income of the state/UT, its growth rate over the previous quinquenna, average completed years of schooling by 20+ population and Human Development Index are possible factors. Regression results show that states/UTs with higher Per capita Income have higher EQI and lower proportion of workers suffering from decent work deficit (Table 10). Similarly, better educational situation and human development situation also brings down magnitude of decent work deficit and increases EQI. On other hand, states with higher growth rates have lower EQI and higher decent work deficit.

6. Impact of Quality Jobs and Decent Work Deficit

We have also tried to examine the impact of decent work on three issues – Poverty, Inequality, and Corruption. It is observed that states/UTs with better employment quality and lower decent work deficit have lower poverty, lower inequality, and lower perceived corruption (Table 11). Thus on one hand, better education, human development and economic situation leads to higher employment quality and lower decent work deficit, quality jobs in turn leads to poverty eradication and economic equality. However, at the same time, the negative impact of faster economic growth on employment quality is a paradox that needs to be explored further in the Indian context.

7. Conclusion

It has been argued that emergence of gig economy riding piggyback on the far reaching tentacles of digitisation has eroded quality of job and pose major challenge to ensuring decent work for all. The gig economy, especially platform based work, designates workers as non-employee leading to informalisation and dis-organisation of workers [though recently the court of justice in UK has ruled that UBER drivers are to be treated as paid employees and all rightful benefits have to be provided to them].

Decent work therefore has to be seen as a stepping stone towards a broader agenda ensuring a decent quality of life to the working class which allows them to plan for a sustainable future not only for themselves but also for their future generations.