Stronger rupee makes employment hunters labour harder
NEW DELHI: The rising rupee has only added fuel to the fire. While employment in the exports-led sectors has taken a beating this year as the rupee appreciated sharply against the US dollar, the strain on the labour market became visible last year.
According to the latest official statistics, the number of registered job seekers in the country shot up by more than 20 lakh to 4.14 crore during 2006. Significantly, the increase comes after two straight years of decline in registered work applicants during 2004 and 2005, a period when the corporate sector started pouring in new investments and expansion capital into the country.
Interestingly, the number of job seekers in India increased at a time when the number of unemployed in more developed but slow-growing economies, such as the US and Japan, came down. The number of registered job seekers in India had shrunk from 4.13 crore in 2003 to 3.93 crore during 2005, the first time in eight years that the absolute number had dropped below the 4-crore mark.
“Job seekers are growing at a rate faster than available opportunities,” International Labour Organisation (ILO) India’s Employment & Labour Market Policy specialist Sukti Dasgupta said.
To put the numbers into perspective, the 5.4% increase in the number of work applicants last year, the highest growth in a decade, was more than thrice the annual growth rate of the country’s population and came about even as the country’s GDP expanded 9.4% during 2006-07.
Also, the absolute number of job seekers was the highest in the last five years, a period when the economy started revving up after a slowdown and corporate restructuring in the late ’90s, when jobs were cut.
There are four possible sources of this addition to the number of job seekers: those entering the work force for the first time, those under-employed in traditional agriculture migrating to towns to seek new jobs, those who lose their jobs and seek fresh ones, and those already employed seeking better alternatives.
“Last year, there was huge urban migration. People are moving out of the farm sector, where there isn’t much money left to be made, looking for jobs in the urban centres. However, most of them are unskilled workers and are not readily employable. This urban migration is going to continue for a long time,” according to TeamLease chairman Manish Sabharwal. TeamLease is the largest temporary staffing firm in the country.
Additional signs of job losses are already visible this year as certain sectors, such as textiles and leather, have started cutting jobs. This is due to the adverse impact of the rupee’s appreciation, which has made Indian exports less competitive.
Interestingly, the increase in the number of registered job seekers in India came about even as most large economies reported a decline in the number of unemployed last year. A sample of 25 large and prominent emerging economies picked by ET for whom unemployment data is available for 2006, shows that more than 80% have reported a decline in the number of unemployed.
This includes even mature markets that have been facing job losses as global corporations move operations to low-cost emerging markets. Countries such as the US, Japan, Germany, Italy, South Korea and Australia reported a decline in unemployment during 2006. Among the emerging economies, Argentina, Mexico, Pakistan, Poland, South Africa and Thailand reported a decrease in the number of jobless.
India was among the few exceptions, including countries such as Russia and Indonesia, which reported an increase in the number of unemployed. While the data may not be comparable on a one-on-one basis given the differences in methodology for collating information, this is in line with global trends.
According to ILO’s Global Employment Trends released early this year, based on preliminary estimates, the number of people unemployed worldwide remained at a historic high in 2006 despite strong global economic growth. The number was pegged at 195.2 million in 2006. In percentage terms, the number of registered job seekers in India would account for about 20% of the world’s job seekers given this ILO estimate that included data from China as well.
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According to the latest official statistics, the number of registered job seekers in the country shot up by more than 20 lakh to 4.14 crore during 2006. Significantly, the increase comes after two straight years of decline in registered work applicants during 2004 and 2005, a period when the corporate sector started pouring in new investments and expansion capital into the country.
Interestingly, the number of job seekers in India increased at a time when the number of unemployed in more developed but slow-growing economies, such as the US and Japan, came down. The number of registered job seekers in India had shrunk from 4.13 crore in 2003 to 3.93 crore during 2005, the first time in eight years that the absolute number had dropped below the 4-crore mark.
“Job seekers are growing at a rate faster than available opportunities,” International Labour Organisation (ILO) India’s Employment & Labour Market Policy specialist Sukti Dasgupta said.
To put the numbers into perspective, the 5.4% increase in the number of work applicants last year, the highest growth in a decade, was more than thrice the annual growth rate of the country’s population and came about even as the country’s GDP expanded 9.4% during 2006-07.
Also, the absolute number of job seekers was the highest in the last five years, a period when the economy started revving up after a slowdown and corporate restructuring in the late ’90s, when jobs were cut.
There are four possible sources of this addition to the number of job seekers: those entering the work force for the first time, those under-employed in traditional agriculture migrating to towns to seek new jobs, those who lose their jobs and seek fresh ones, and those already employed seeking better alternatives.
“Last year, there was huge urban migration. People are moving out of the farm sector, where there isn’t much money left to be made, looking for jobs in the urban centres. However, most of them are unskilled workers and are not readily employable. This urban migration is going to continue for a long time,” according to TeamLease chairman Manish Sabharwal. TeamLease is the largest temporary staffing firm in the country.
Additional signs of job losses are already visible this year as certain sectors, such as textiles and leather, have started cutting jobs. This is due to the adverse impact of the rupee’s appreciation, which has made Indian exports less competitive.
Interestingly, the increase in the number of registered job seekers in India came about even as most large economies reported a decline in the number of unemployed last year. A sample of 25 large and prominent emerging economies picked by ET for whom unemployment data is available for 2006, shows that more than 80% have reported a decline in the number of unemployed.
This includes even mature markets that have been facing job losses as global corporations move operations to low-cost emerging markets. Countries such as the US, Japan, Germany, Italy, South Korea and Australia reported a decline in unemployment during 2006. Among the emerging economies, Argentina, Mexico, Pakistan, Poland, South Africa and Thailand reported a decrease in the number of jobless.
India was among the few exceptions, including countries such as Russia and Indonesia, which reported an increase in the number of unemployed. While the data may not be comparable on a one-on-one basis given the differences in methodology for collating information, this is in line with global trends.
According to ILO’s Global Employment Trends released early this year, based on preliminary estimates, the number of people unemployed worldwide remained at a historic high in 2006 despite strong global economic growth. The number was pegged at 195.2 million in 2006. In percentage terms, the number of registered job seekers in India would account for about 20% of the world’s job seekers given this ILO estimate that included data from China as well.
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