Many questions arising from QES data

Labor Bureau has released the result All India Quarterly Establishment Based Employment Survey (QES) For the first quarter (FQ) of 2021 (April to June). The survey covers establishments employing 10 or more workers in the organized segment across nine sectors (manufacturing, construction, trade, transportation, education, health, housing and restaurants, IT/BPO, and financial services activities). These sectors account for 85% of total employment in establishments employing 10 or more workers according to the Sixth Economic Census (EC), which serves as the basis for the QES survey. Data for QES was collected either by telephone or via visits. The report warned that “verification of records has not been resorted to for collection of data”. This can have important implications for the data generated from the survey. While QES provides a demand side picture, the National Sample Survey or Periodic Labor Force Survey (PLFS) gives a supply side picture of the labor market.

The stated objective of QES is to enable the government to formulate “a good national policy on employment”. India ratified the International Labor Organization’s Employment Policy Convention, 1964, which required ratifying countries to implement “a proactive policy designed to promote full, productive and freely elected employment”. Is. India doesn’t have one yet.

The PLFS has not presented an encouraging picture of the labor market. CMIE is projecting a distressed labor market scenario, especially during the pandemic. Despite the criticisms, the CMIE database continues to dominate the analysis and understanding of the labor market. This can be quite troublesome for any ruling party. Thus, the government needed an ‘official’ database that paints a rosy picture of the economy and the labor market (remember the controversy over the release of the PLFS results in 2019, which had the highest unemployment rate of 6.1%). The government has been using payroll data from time to time to show improvements in formal job creation and/or employment during the pandemic. It is not surprising that QES has registered a simple growth rate of 29% in employment in FQ2021 as compared to 2013-14 (6th EC).

data that raises eyebrows

However, oddly enough, QES provides very broad employment figures – “3 crore and 8 lakh approx” in FQ-2021, as against 2 crore and 37 lakh in these sectors taken collectively. [in 2013-14]Either way, these are impressive figures. But let’s put these figures in perspective. Between the Fifth EC (2005) and the Sixth EC (2013), employment grew at a simple growth rate of 38.13%. And the Fourth EC Between (1998) and the Fifth Election Commission (2005), it increased by 21.13%. The compound annual growth rate (CAGR) – a far more reliable indicator of the growth rate over several years – is between the two at 4.12%. The estimated CAGR between 6th EC and FQ2021 is 3.33%.

The remarkably simple growth rate mentioned above compares a normal period to a period devastated by a pandemic. The overall growth rate is inconsistent with macro-economic factors and other labor market depictions. CMIE data revealed a gloomy picture in April as the salaried segment estimated 3.4. million jobs and the urban unemployment rate as high as 9.78% from March 2021 levels. Furthermore, general economic indicators such as earnings growth rate, capacity utilisation, business confidence, aggregate demand as measured by the Purchasing Managers’ Index and the Reserve Bank of India’s growth rate of high frequency indicators during the pandemic did not show encouraging trends, even though they were fluctuating. – Ascend. The provisional estimates of annual national income for 2020-21 showed contraction in manufacturing (-7.2.%), construction (-8.6%) and trade (-18.2%), which are some of the sectors included in the QES. The real national income growth rate, although controversial for an upward revision, has declined since 2017-18 – from 2013-14 to 2020-21 at an annual average growth rate of 4.95%. Are we talking about job growth despite an economic slowdown – from jobless growth to job-loss growth to undeveloped job growth?

Various surveys and reports, including those of the central government, have revealed that small establishments have suffered much more than large industries. This was certainly higher during the more extensive lockdown period, April-June 2020, when they faced challenges related to loan repayment, salary/salary and statutory dues. They are also least likely to have permanent employees on their payroll. Given that approximately 75% of the estimated establishments employ less than 40 employees, as reported in the QES, one wonders about the reliability of the two figures reported in the report. One, of the estimated workers, 87.5% were regular workers and about 2.1% (12.5% ​​in construction) were casual workers. Two, even though around 24-35% of establishments were operational from March 25 to June 30, 2020, excluding health and financial services, 66-86% of the estimated workforce received full salaries, including in the construction, trade and hospitality industries. We should take these figures as claims of employers rather than as reliable figures.

The report presents another startling statistic. It said the share of contract workers is 0.7 per cent (IT/BPO), 10.4 per cent (manufacturing) and 17.6 per cent (construction) and overall it is just 7.8 per cent. According to the Annual Survey of Industries for 2017-18, 36.37 percent of the total workers are employed in the organized factory sector. However, the contrast-statistics reported in the QES are plausible because given low employment demand, cost-minimizing manufacturers would be more likely to include permanent and possibly unionized and high-skilled workers, while employing flexible categories of workers. Will have to queue for Better times come. On the other hand, the report acknowledges a decline in the share of women workers in the sixth EC from 31% to 29% in FQ2021. Like the Sixth Election Commission, it could collect data on social aspects such as caste and religion as the pandemic would have had different effects on the social status of workers. Registration under the laws showed that the data on the formality of establishments should take into account two aspects. One, there may be overlap between registrations (eg, factories or shops registered under more than one law). Second, since this is an employment survey, it is relevant to consider the labor laws under which the establishment can be registered like the Factories Act, the Shops Act or the Building and Other Construction Workers Act and the inclusion of tax laws in the form of QES. Instead workers can be employed.

a starting point

We need to wait for the unit level data to generate and cross-tabulate the data at different levels to better understand the labor market dynamics as compared to the ratios released in this report. At any rate, the F12021 QES should be considered as the starting point of the new data set rather than as a continuation of the sixth EC because the seventh EC would enable sensible comparisons. Finally, it is baffling why the Bureau of Labor has launched a five-volume employment survey when it could have established a high-frequency labor market information base like in most advanced economies.

Shyam Sundar Professor, HRM Area, XLRI, Xavier School of Management, Jamshedpur