By Veronica Pala
The labour force of a country or state is a measure of the supply of labour. It consists of the economically active population, that is, persons who are working and persons who are unemployed. Unemployed persons are those who are not working but either making tangible efforts to seek work or being available for work. The unemployment rate is the percentage of those who are seeking or available for work out of the labour force. The Government of India through the National Sample Survey Office (NSSO) conducts the Periodic Labour Force Survey (PLFS) annually since 2017-18. Prior to that, the Employment and Unemployment Surveys were conducted in quinquennial rounds till 2011-12. The annual reports and the Quarterly Bulletins of PLFS as well as the reports of earlier surveys are available in the official website of the Ministry of Statistics and Programme Implementation (www.mospi.gov.in). One needs to understand the various approaches used to estimate the unemployment rates in order to be able to decipher the figures published in the official reports.
(i) Usual status (ps+ss) approach: In this approach, the estimates of unemployment rates are based on usual status considering principal and subsidiary statuses together. Usual principal status means the activity status (working, unemployed or not in the labour force) in which a person is reported to be for the major part of the year preceding the survey. Usual subsidiary status means the reported status for a lesser part of the year, i.e. less than 180 days but at least 30 days, not necessarily for a continuous period. The labour force includes all those who are working in a principal as well as subsidiary capacity plus the unemployed. The unemployment rate excludes those who are unemployed for the most part of the year but working in a subsidiary or marginal capacity. So this measure is also called usual status (adjusted) unemployment rate. (ii) Usual principal status: This measure relates to chronic unemployment by considering those who are unemployed for the major part of the 365 days preceding the date of survey. (iii) Current weekly status approach: In this approach, a person was considered as unemployed if he/she did not work even for 1 hour during the week but sought or was available for work at least for 1 hour during the week. In other words, if a usually unemployed person worked for at least 1 hour on any day during the 7 days preceding the date of survey, that person is considered as working and not unemployed in the current weekly status.
It is no wonder that estimates based on the three approaches are very similar. Considering that most of the poor and unemployed cannot afford to remain unemployed for long, and therefore, they would work in any kind of job that they could find, the official unemployment rates based on any of the approaches can be considered as an underestimate of the extent of unemployment. Hence unemployment in developing countries tends to be low. This fact notwithstanding, let me present here some of the results from the latest available survey, the PLFS of July 2022- June 2023. The PLFS is a nationally representative sample survey based on a stratified multi-stage sampling design. Estimates on labour force participation rates, worker- population ratios, unemployment rates and various other parameters at the national as well as state levels have been validated and usually comparable to those obtained from census surveys. At the district level and for certain population subgroups, estimates need to be interpreted with caution if the sample size is too low. For example, estimates for Scheduled Castes in Meghalaya may not be reliable. The number of households actually surveyed in PLFS 2022-23 was 101,655 in the entire country, 55,844 households in the rural areas and 45,811 households in the urban areas. The sample size in Meghalaya was 832 households from 104 villages and 448 households from 56 urban frame survey blocks or census enumeration blocks in urban areas giving a total of 1280 households. All the 7 districts were covered since sampling frame is always based on the last census and there were only 7 districts in 2011. Estimates from PLFS and other surveys conducted by NSSO are official estimates and used for policy purposes by various government and international institutions or agencies. As per the PLFS 2022-23 based on the usual status (adjusted) approach, the overall unemployment rate in Meghalaya was 6% compared to the all India average of 3.2%. Youth unemployment (15-29 years) was 18% for Meghalaya compared to 10% for all India. The rate was 16.3% for those who have completed higher secondary, 14.5% for graduates and 17.5% for post graduates in Meghalaya compared to 4.6%, 13.4% and 12.1% respectively for all India. Although it is said that statistics hide more than they reveal and that statistics are double-edged swords, the qualitative message from these numbers is that unemployment rate in Meghalaya is much higher than the all India average.
Further, a far more widespread problem that the state is facing is that of under-employment. Under-employed workers tend to work less hours, earn less income or use their occupational skills incompletely; in other words, they carry out an activity which is less productive than they could and would like to do. They are in an ‘inadequate employment situation’. Unemployment statistics, defined as a situation of a total lack of work, do not cover such workers. The measurement of underemployment was discussed at the 16th and 19th International Conferences of Labour Statisticians (ICLS) in 1998 and 2013 respectively. The ICLS is hosted by the International Labour Organisation every five years. Time-related underemployment is the only component of underemployment to date that has been agreed on and properly defined within the international community of labour statisticians. The Indian PLFS includes questions about the duration of employment and whether the respondent worker is available for additional hours of work. These pertain to time-related underemployment only. However, the concept of underemployment reflects under utilization of the productive capacity of the labour force and has many facets. To some extent it can be gauged from the wages or earnings data and the occupations in which workers are engaged relative to their education level. That would be a topic for another discussion.
(The writer teaches Economics at North Eastern Hill University)