India Unable to Produce Enough Jobs for Swelling Labor Force
India’s unemployment rate in December climbed to its highest point since a nationwide pandemic lockdown, as the country struggles to produce enough jobs to absorb a growing workforce.
(Bloomberg) -- India’s unemployment rate in December climbed to its highest point since a nationwide pandemic lockdown, as the country struggles to produce enough jobs to absorb a growing workforce.
The joblessness rate in the first three weeks of December was over 8% of the available labor force, Mahesh Vyas, head of the Centre for Monitoring Indian Economy Pvt. Ltd, wrote in a column for the Business Standard newspaper. Since India’s first lockdown in 2020, the rate hasn’t strayed beyond 6%-8%.
Vyas said weekly data shows that more people are entering the workforce, but job growth hasn’t kept up. Joblessness in urban areas jumped to a record 10.9% in the week that ended on Dec. 18. Rural unemployment was at 8.4% during the same period. That compares with 7.6% in November.
Rising unemployment in the past few months “is a bit worrisome,” Vyas wrote, as it “cannot be explained by the seasonal movement of labor in and out of agriculture.” India’s harvesting season has been better so far compared to the previous three years.
Vyas said quality of jobs is one factor. While rural unemployment is high, so too is the employment rate. “The latter implies that rural India is able to provide more jobs than earlier, but the former implies that it is not able to provide adequate jobs,” he wrote.
The average rural employment rate in the first three weeks of December was 38.6%, compared with 37.5% in November, but labor force participation increased from 40.4% to 42.2% in the same period.
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