Number of women workers decline in India due to slowdown, pandemic; younger ones facing too many challenges

Even 73 years after independence, India’s women, especially young women are faced with innumerable constraints in getting employed. The gender gap in employment which was already there in the beginning of 1950’s is still showing despite big increase in female education and expansion of vocational and technical education of women.

According to the studies made by the Centre for Monitoring Indian Economy (CMIE), India’s biggest challenge on the employment front is getting its women folk into the labour force. While 67 per cent of all men of working age are employed, only 9 per cent of all women of working age are employed. This gap between men and women in India’s workforce is the potential labour available to deploy productively in economic activities.

Given that men continue to be considered as the principal earning member of a household, women are unlikely to accept poor quality jobs. Household incomes have risen to a point where employment for women as a second earning member of a typical household is not as much of a necessity as it is a choice. Such a choice will be exercised only if the job on offer is of good quality without punishing working conditions or prohibitive transaction costs.

But, good jobs are on the decline. Formal jobs that provide opportunities to build a career are not the ones that are growing. Informal jobs now also with a fashionable component as gigs are more common. Contractual jobs are on the rise. Large companies that provided good quality jobs have chosen to outsource jobs to contractors who engage labour on poorer terms than offered by the large firms to labour directly.

As CMIE study explains, women face a particularly hard time in these deteriorating labour market conditions. Although the labour participation rate for women is very low at less than 11 per cent compared to 71 per cent for men, they face a much higher unemployment rate of 17 per cent compared to 6 per cent for men. The much fewer women who seek work find it much harder to find work compared to men. This is disconcerting as it suggests a bias against employing women.

Young women who make efforts to join the labour force first face these extremely adverse conditions of the labour markets. Then, they soon face difficulties in managing responsibilities at home and of motherhood. It is therefore not very surprising that economic shocks hit women’s participation in the labour markets disproportionately.

CMIE data show women accounted for 10.7 per cent of the workforce in 2019-20 but, they suffered 13.9 per cent of the job losses in April 2020, the first month of the lockdown shock. By November 2020, men recovered most of their lost jobs but women were less fortunate. 49 per cent of the job losses by November were of women. The recovery has benefitted all but, it benefitted women less than it did for men.

Data from CMIE’s Consumer Pyramids Household Survey show two disturbing trends with respect to women’s participation in the workforce in India.

First, urban women participate much lesser in the workforce than rural women. In 2019-20, female labour participation rate among urban women was 9.7 per cent against 11.3 per cent among rural women. Both participation rates are very low but the lower rate among urban women runs against expectations. This is because urban women are expected to be better educated and because urban India is expected to offer them better and more jobs than rural India.

The lockdown experience of urban women is particularly distressing in this case. In April 2020, the urban FLPR fell to 7.35 per cent, which was over 200 basis points lower than its average of 9.7 per cent in 2019-20. But, unlike many other indicators, the urban FLPR did not recover. On the contrary, it effectively, continued to slide. In October 2020, female labour participation in urban India dropped to 7.2 per cent the lowest since CMIE began measuring this indicator in 2016. Data for November show that the fall in urban FLPR in October was not a mere outlier, it fell further to 6.9 per cent.

The second observation from the CPHS is about the impact of economic shocks on younger women who join the labour force. The young women we talk about here are those in their early twenties. And, the data we use for this is Wave-wise. The CPHS is conducted over a 4-month period and each four-month period is called a Wave.

In the Wave of January-April 2016, the female labour participation rate was 15.7 per cent. This rose to 16.4 per cent in the May-August 2016 Wave. It then fell in each of the next three Waves to stabilise at around 11 per cent in response to the demonetisation shock. Then, it fell again in response to the lockdown shock in 2020 to close to 9 per cent.

Thus it is seen from the CMIE data that all through the last four years since the demonetisation in November 2016, women, especially, the young women workforce faced utmost hardships in getting suitable jobs. The adverse impact of demonetization got further intensified with slowdown of economy and the worst took place with the lockdown in the country due to pandemic from March 25 which continued for long five months in various phases. Even though, the situation has eased considerably in terms of economic activities in the country, many sectors are still closed. The Government has to work on special strategy to ensure that the women workforce get adequate opportunities in its jobs planning after the pandemic. Otherwise, the gender gap in the employment area, will continue to widen.

(IPA Service)