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Understanding Employment Growth
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Today we will explore the relationship between employment growth and GDP growth in India. Can anyone tell me what GDP is?
GDP stands for Gross Domestic Product, which is the total value of goods and services produced in a country.
Exactly! And how does this relate to employment? Why is it significant if GDP grows but employment does not?
If GDP grows without job growth, it might mean that the economy is becoming more efficient, but fewer people can find jobs.
Right! This is known as 'jobless growth.' It's crucial for economists and policymakers to ensure that economic growth translates into job creation to support societal well-being.
So, what can be done to change this?
Great question! We will tackle that in future sessions. But first, let's recap what we've learned: GDP is crucial for measuring economic health, but without job growth, the benefits of that growth are limited.
Shift in Employment Structure
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Now, let’s talk about the shifts in employment over the decades. In what sectors have we seen the most change?
We have seen a lot of movement from agriculture into manufacturing and services since the early years.
Exactly! The percentage of the workforce in agriculture declined sharply. What were the figures from 1972 to 2011-2012?
It went from about 74% to 50%.
Correct! And as this shift occurs, what does it imply for the workforce?
It means new types of jobs are being created, especially in the service sector.
Very good! New opportunities arise, especially in urban settings, which is important for economic planning.
Casualisation of the Workforce
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Next, we examine the idea of casualisation of the workforce. Who can explain what that means?
It’s when more workers shift from stable jobs to temporary or casual work that’s less secure.
Exactly! This trend increased vulnerability among workers. Why do you think that is?
Because casual workers often lack benefits and job security.
True! And this makes it harder for these workers to plan for the future. Let's summarize the key points: casualisation is volatile and can affect workers' quality of life dramatically.
Introduction & Overview
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Quick Overview
Standard
The section highlights the historical growth patterns of employment and GDP in India from 1950-2010, emphasizing that while GDP has grown significantly, employment growth has lagged, leading to a phenomenon known as 'jobless growth.' The discussion includes shifts in employment from agriculture to various sectors, the status of self-employment versus casual wage labor, and the implications of these changes on the workforce.
Detailed
Detailed Summary
The section examines the growth and changing structure of employment in India from 1950 to 2010, focusing primarily on the comparative growth of Gross Domestic Product (GDP) and employment. While GDP has seen consistent growth during this period, the corresponding growth in employment has stagnated at a rate of approximately 2% annually.
Key Points Discussed:
- Employment Growth vs. GDP Growth: Between 1950 and 2010, India experienced positive GDP growth which outpaced employment growth, resulting in 'jobless growth.' This phrase refers to economic growth without proportional job creation.
- Sectoral Shifts: Over the decades, there has been a significant shift in the employment structure; the percentage of workers engaged in agriculture has dropped from 74% in 1972 to around 50% in 2011-2012. Conversely, the secondary sector's share (manufacturing and construction) and service sector's share have both increased, indicating a broader spectrum of employment opportunities.
- Casualisation of Workforce: From 1972 to 2018, there was a trend of workers shifting from more stable forms of employment (self-employed and regular salaried) to insecure, casual wage work. This phenomenon increases vulnerability among these workers.
- Implications for Policy and Planning: These employment trends highlight challenges for policymakers who aim to create jobs while ensuring decent working conditions. Understanding the distinctions between employment types (self-employed, casual wage, regular salaried) is essential for formulating effective employment policies.
- Conclusion: Despite growing GDP, the dissonance between economic growth and employment generation suggests the need for strategic planning to invigorate job creation that aligns with the growing sectors of the economy, particularly in the emerging service sector.
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Growth of Employment vs. GDP
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In Chapters 2 and 3, you might have studied about the planning strategies in detail. Here we will look at two developmental indicators — growth of employment and GDP. Nearly seventy years of planned development have been aimed at expansion of the economy through increase in national output and employment.
Detailed Explanation
This chunk introduces the idea that economic planning in India over the last seventy years has focused on two main goals: increasing the overall economy (measured by GDP) and creating more jobs (employment). It sets the stage for understanding the relationship between economic growth and job creation in India.
Examples & Analogies
Think of a school that wants to improve its overall performance. The school aims to increase the number of students (representing employment) while also striving to get higher grades (representing GDP). Just as students' performance needs encouragement and resources, so does the workforce in a country to achieve economic growth.
Discrepancies in Employment Growth
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During the period 1950–2010, Gross Domestic Product (GDP) of India grew positively and was higher than the employment growth. However, there was always fluctuation in the growth of GDP. During this period, employment grew at the rate of not more than 2 per cent.
Detailed Explanation
This section highlights a crucial issue: while the GDP has been growing, employment growth has lagged behind, averaging only about 2% yearly. This indicates a troubling trend where the economy can grow without necessarily creating more jobs. The fluctuations in GDP suggest that the growth isn't steady or consistent, which can impact overall job creation.
Examples & Analogies
Imagine a bakery that is making more cakes (GDP), but because it's investing in machines instead of hiring more bakers, the number of staff stays the same (employment growth). The bakery’s profits might rise, but fewer people are getting jobs in the process.
Jobless Growth Phenomenon
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Chart 6.3 also points at another disheartening development in the late 1990s: employment growth started declining and reached the level of growth that India had in the early stages of planning. During these years, we also find a widening gap between the growth of GDP and employment. This means that in the Indian economy, without generating employment, we have been able to produce more goods and services. Scholars refer to this phenomenon as jobless growth.
Detailed Explanation
The text notes a significant concern during the late 1990s when employment growth began to decline, mirroring earlier, less productive times. This widening gap between GDP growth and job creation suggests that while the economy is increasing its output, it is not translating that growth into employment opportunities. The term 'jobless growth' reflects this paradox.
Examples & Analogies
If a restaurant expands its menu and serves more meals (represents GDP growth) but does not hire more staff to serve customers, it experiences 'jobless growth.' The restaurant might be busier but is not providing new jobs for people looking to work.
Changing Employment Structure
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From this we will also be able to understand what types of employment are generated in our country. Let us look at two indicators that we have seen in the preceding sections — employment of people in various industries and their status. We know that India is an agrarian nation; a major section of population lives in rural areas and is dependent on agriculture as their main livelihood.
Detailed Explanation
This chunk sets the groundwork for analyzing the types of jobs available in India, focusing on how many people work in different sectors and their employment status. Recognizing that India has a significant rural population heavily reliant on agriculture allows for a deeper understanding of the employment landscape.
Examples & Analogies
Consider a farmer who relies entirely on crops for income. If the demand for those crops decreases and the farmer doesn't diversify into other types of work, he remains vulnerable. Similarly, a country that relies on one sector, like agriculture, can find its employment levels unstable.
Shift from Agriculture to Non-farm Work
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Distribution of workforce by industrial sectors shows substantial shift from farm work to non-farm work. In 1972-73, about 74 per cent of workforce was engaged in primary sector and in 2011-12, this proportion has declined to about 50 per cent. Secondary and service sectors are showing promising future for the Indian workforce.
Detailed Explanation
This section discusses a significant change in employment patterns: a reduction in the proportion of workers engaged in agriculture (from 74% to 50%) from 1972 to 2012. The growth of the secondary (manufacturing) and service sectors suggests a diversifying economy and the creation of new types of jobs.
Examples & Analogies
Think about someone transitioning from farming to working in a factory. As the economy shifts from agricultural dependence to industrial or service sectors, workers like this find new opportunities, much like how a student explores various career options after high school.
Casualisation of Employment
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Over the last five decades (1972-2018), people have moved from self-employment and regular salaried employment to casual wage work. Yet self-employment continues to be the major employment provider.
Detailed Explanation
This portion highlights the trend of workers shifting towards casual wage jobs instead of secure, salaried employment. Although self-employment remains the largest source of jobs in India, the rise in casual work indicates growing instability in job security and income.
Examples & Analogies
Imagine a skilled carpenter who used to work for a single company. If the company hires him as a freelancer with no job security, his work becomes 'casual.' Although he can work for himself, he now faces uncertainties about income, akin to how older children may find temporary jobs versus steady employment.
Stagnation of Employment Growth
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Scholars call the process of moving from self-employment and regular salaried employment to casual wage work noticed during 1972-94 as casualisation of workforce.
Detailed Explanation
The text explains that the transition towards more casual work is labeled as 'casualisation,' which implies that workers are increasingly engaged in less stable job types. This trend presents challenges as casual workers often lack benefits and job security.
Examples & Analogies
Think of someone who has always worked full-time with benefits, like healthcare, suddenly being offered freelance work without benefits. Although they may earn more per hour, they lose the stability that comes with a regular job; this mirrors the anxiety felt by many casual wage workers.
Definitions & Key Concepts
Learn essential terms and foundational ideas that form the basis of the topic.
Key Concepts
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Employment Growth: The increase in the number of jobs available in an economy.
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GDP Growth: The increase in the economic output measured by GDP.
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Casualisation: The movement of workers into less secure jobs.
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Sectoral Shift: The transition of employment from agriculture to manufacturing and services.
Examples & Real-Life Applications
See how the concepts apply in real-world scenarios to understand their practical implications.
Examples
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In the past, around 74% of Indian workers were engaged in agriculture; this has decreased to about 50% due to growth in manufacturing and services.
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More workers are now engaged in casual wage jobs as opposed to traditional jobs, indicating a shift towards more volatile employment.
Memory Aids
Use mnemonics, acronyms, or visual cues to help remember key information more easily.
🎵 Rhymes Time
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GDP grows high, but jobs don't imply, jobless growth makes many sigh.
📖 Fascinating Stories
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Once in a village, workers transitioned from farming to services, but with many losing stable jobs, their future felt uncertain. They wished for a return to secure days.
🧠 Other Memory Gems
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G-C-S: GDP, Casualisation, Sector Shift - remember these key topics of employment!
🎯 Super Acronyms
J-G
- Jobless Growth – where numbers rise
- but jobs stay shy.
Flash Cards
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Glossary of Terms
Review the Definitions for terms.
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Term: GDP
Definition:
Gross Domestic Product, the total monetary value of all final goods and services produced in a country within a specified time period.
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Term: Jobless Growth
Definition:
Economic growth that occurs without a corresponding increase in employment.
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Term: Casualisation
Definition:
A trend where workers shift from regular employment to temporary or casual work, leading to increased job insecurity.