Proportion of workers, Microeconomics

Proportion of Workers in Organised and Unorganised Workers:

Increasing share of employment in unorganised sector reflect the deterioration in the quality of employment because workers' earnings, regularity of employment, work environment and social security vastly differ between organised and unorganised sector. Workers in the organised sector have better wages and salaries, job security, reasonably decent working conditions and social protection against such risks as sickness, injuries, disability and death arising out of hazards and accidents at work, separations, and old age. Those in the unorganised sector apart from security of job generally have no protection against these risks, have low earnings, often lower than the modest statutory minimum wages and have no regularity. An increase in the share of unorganised employment obviously means  an overall deterioration in the quality of employment. An important aspect related to quality of employment is the large size of unorganised sector  as against organised sector in total employment. The size of the organised sector, characterised by higher earnings and job security, is small. It was only about 7 per cent of the total employment in 1999-2000. Over the years, the share of the organised sector employment has been shrinking and that of the unorganised sector increasing. Organised sector employment grew at 1.20 per cent per annum during   1983-94 but only at 0.53 per cent between 1993-1994 and 1999-2000. Though the overall proportion of organised sector employment has come down only marginally between 1993-94 and 1999-2000, the proportion has considerably decreased in construction, transport, storage and communication and financial services. Manufacturing, construction,  trade and transport  are sectors where there is large concentration of unorganised workers.  

According to the estimates provided by the Director General of Employment and Training (DGET), organised sector employment saw an absolute decline of 9.1 lakh during the period March 1997 to March 2002; more than half of it in the manufacturing sector. During the single year 2001-2002, organised sector employment declined by 4.2 lakh. Unorganised sector employment, on the other hand, has shown consistently higher growth than that of the organised sector. The share of the unorganised sector employment which was estimated to be around 93 per cent earlier should, therefore, have gone up and may further increase over the coming years.   

Even within the organised sector, an increasing number of jobs are assuming the character of those in the unorganised  sector as a result of the increasing labour market flexibility in the wake of globalisation. A comprehensive survey of about 1300 firms, scattered over 10 states and nine important organised manufacturing industry groups (consisting of both public and private sectors) shows that between 1991 and 1998 although the total employment increased by over 2 per cent, most of the increase was accounted for by temporary, casual, contract and other flexible categories of workers (Deshpande, 2004). Several other studies at micro level also show that flexibility in the labour market increased after the introduction of economic reforms in India, and despite the existence of restrictive labour laws, the firms have been able to retrench a large number of permanent workers while many units were closed leading to unemployment of thousands of workers.  

Posted Date: 11/10/2012 5:02:13 AM | Location : United States

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