6.4. SELF-EMPLOYED AND HIRED WORKERS

Does the worker-population ratio say anything about workers’ status in society or about the working conditions? By knowing the status with which a worker is placed in an enterprise, it may be possible to know one dimension — quality of employment in a country.

The worker-population ratio helps us understand how many people are participating in the economy as workers. By examining this ratio, we can assess the employment quality and the conditions under which workers operate. For example, a high ratio may suggest more people are engaged in work, but it doesn’t indicate the working conditions are good. Therefore, knowing the status of workers helps in understanding the broader picture of employment quality.

Think of it like the score of a sports team. A high score may indicate that a team is winning, but it doesn’t tell you how well each player is performing individually. Similarly, the worker-population ratio tells us how many are working, but not if they have good jobs.

Let us take three workers from the construction industry — a cement shop owner, a construction worker, and a civil engineer of a construction company. Since the status of each one of them is different from another, they are also called differently. Workers who own and operate an enterprise to earn their livelihood are known as self-employed. Thus the cement shop owner is self-employed.

In the construction industry, there's a variety of workers with different roles, each with a distinct work status. The shop owner who runs a cement business is classified as self-employed because they operate their own business. In contrast, the construction laborers and engineers have different employment statuses due to their roles and the nature of their work. This classification helps us understand the diversity in employment and income sources available in the labor market.

Imagine a fast-food restaurant. The owner who runs the restaurant is self-employed, the chefs who cook the food are employees, and the manager overseeing the operation is a salaried worker. Each has different responsibilities and benefits, reflecting their varying statuses.

About 52 percent of workforce in India belongs to this category. The construction workers are known as casual wage labourers; they account for about 25 percent of India’s workforce. Such labourers are casually engaged in others' farms and, in return, get a remuneration for the work done.

Self-employment is quite prominent in India, with over half of the workforce classified in this way. Self-employed individuals operate their own businesses and earn directly from their work. In contrast, about a quarter of the workforce is classified as casual wage laborers, who are dependent on casual jobs, often involving manual labor on farms or projects, and receive payment for their labor.

Think about your neighborhood. In many places, you’ll find fruit sellers who own their carts and sell directly to customers – they are self-employed. Next, you may have daily wage workers who help with gardening or construction – these are casual laborers getting paid for short-term jobs.

W orkers like the civil engineer working in the construction company account for 23 percent of India’s workforce. When a worker is engaged by someone or an enterprise and paid his or her wages on a regular basis, they are known as regular salaried employees.

Regular salaried employees are those workers who have secure employment with a company, typically receiving a consistent paycheck. The example of the civil engineer highlights this category, which is an important segment of the workforce, contributing significantly to the stability of incomes and employment security for many families.

Consider a teacher in a school, who receives a salary every month without fear of losing their job every few days. This is much different from a freelancer who works on contracts and may not have a steady income. Regular salaried employees enjoy benefits that offer them security.

Look at Chart 6.1 you will notice that self-employment is a major source of livelihood for both men and women as this category accounts for more than 50 percent of the workforce. Casual wage work is the second major source for both men and women.

The chart illustrates that self-employment is the dominant employment type in India, representing over half of all workers. This showcases the entrepreneurial spirit among the population, across genders. Casual wage work is next, highlighting the significant number of individuals employed in temporary, low-security jobs. Understanding this distribution sheds light on economic resilience and vulnerabilities.

Imagine a busy marketplace where many stalls are run by local vendors selling handmade goods, alongside workers who are doing temporary jobs for the day, like packers or loaders. The vendors represent self-employed workers, while the laborers showcase casual wage employees.

In urban areas, both self-employment and regular wage salaried jobs are greater. In the former, the majority of those depending on farming own plots of land and cultivate independently, the share of self-employed is greater. The nature of work in urban areas is different.

Urban areas tend to have more opportunities for regular salaried employment and self-employment due to the availability of diverse industries and services. In contrast, many rural workers engage in agriculture and are often self-employed because they own the land they farm. The difference in employment nature reflects the economic development pattern between urban and rural areas.

Think of a city where you find many startups and office jobs compared to a village where a farmer has his own land. In the city, you find formal job positions, while in the village, farmers work independently for their livelihoods.

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