urban-employment-as-the-focal-point

 

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Context: The pandemic and associated policy responses have exposed the vulnerability of informal urban jobs.

Background:

  • Contraction of the economy and unemployment: The 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.
  • 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.
  • Poor quality jobs in India: 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. 
  • Working poverty: The poor quality of jobs and high informality are key for the high level of “working poors” or those living on incomes of less than ₹198 in a day. 
    • Thus, despite higher economic growth in recent years, working poverty in India also remains high. 
  • Vulnerabilities of urban informal jobs: Vulnerable employment is characterised by inadequate earnings, low productivity and difficult conditions of work that undermine the basic rights of workers. 
  • Reverse migration: India witnessed a wave of massive ‘reverse migration’ during the early phase of the lockdown, with millions of workers returning to their home States due to a loss of livelihoods.
    • The Mahatma Gandhi Employment Guarantee Act (MGNREGA) or PM Garib Kalyan Yojna cannot absorb a significant proportion of these workers.

Causes for high incidence of informality 

  • Urbanisation : Due to the high pace of urbanisation in India, capital and labour are moving from low value-added activities in a sector to another sector, but not to higher value-added activities. 
  • Creation of poor quality jobs: The service sector-led growth in recent years has intensified this as there is coexistence of strong job creation in some Information and Communication Technology (ICT)-intensive services, along with a significant portion of the jobs being created in ‘traditional low value-added services.

Challenges:

  1. To generate more jobs and second
  2. To reduce vulnerabilities by providing decent wages and some form of job security.

Way forward:

  • Urban employment generation in coordination with local governments: Resource mobilisation could be enabled by the formation of local alliances, involving elected representatives, trade unions, entrepreneurs and community groups’.
    • An immediate launch of an urban employment scheme oriented toward building large-scale medical, health and sanitation infrastructure in cities and towns across India. 
  • Expansion of MGNREGA by both increasing the budgetary allocations and the guaranteed minimum number of days of work.  
  • Implementing employment-intensive investment policies: 
    • 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, the fulcrum of industrialisation, need extra support to balance the interests between labour and capital as neither have collective bargaining powers. 
    • Prioritising urban infrastructure as it accounts for a large share of total investments in the local economy.
  • Invest in infrastructure

    • Poor urban dwellers lack housing, roads, sewerage and water systems are inadequate for their needs. 
    • 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. 
    • Construction of low-cost housing can be carried out using labour-intensive methods, while yielding substantial collateral benefits for urban dwellers’.

After reading this article, answer the following question for Mains answer writing practice. Also you can get your answer checked free of cost by clicking on the following link.

For Mains:https://www.jatinverma.org/home/typepost/dailymainsanswerwriting

Q) 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.The present crisis calls for a multi-pronged strategy to tackle the issue of urban jobs.Discuss. (250 words)