Urban Unemployment Rate Declines to 6.6%: April-June 2023 Government Survey

Urban Unemployment Rate Declines to 6.6%: April-June 2023 Government Survey

Amidst the volatile economic scenarios of the past few years, a shimmer of optimism appears on the horizon as the unemployment rate in urban areas experienced a dip, settling at 6.6% during April-June 2023, according to a recent government survey.

The years leading up to 2023 saw fluctuating unemployment rates, primarily driven by global events, technological changes, and domestic policy shifts. The pandemic and subsequent lockdowns of 2020 and 2021 led to a historic high in unemployment, forcing businesses to shutter and millions to lose jobs overnight.

According to statistics from the National Sample Survey Office (NSSO), the unemployment rate for those aged 15 and over in urban areas decreased from 7.6% in April to June of last year to 6.6% in April to June of this year.

The percentage of jobless people in the labour force is known as the unemployment rate or unemployment rate.

In April to June 2022, unemployment was high primarily as a result of the devastating effects of Covid-related limitations on the nation.According to the 19th Periodic Labour Force Survey (PLFS), the UR for those aged 15 and over in urban areas was 7.6% in April–June 2022.

The unemployment rate during the three months of January to March 2023 was 6.8%. Both in October-December 2022 and July-September 2022, it was 7.2%.

It also demonstrated that the unemployment rate for women (aged 15 and older) in metropolitan areas decreased from 9.5% in the same quarter last year to 9.1% in April–June 2023.

It was 9.2% from January through March 2023, 9.6% from October through December 2022, and 9.4% from July through September 2022.

In metropolitan regions, the unemployment rate for men fell to 5.9% in April–June 2023 from 7.1% in the same quarter a year earlier.

It was 6% from January through March 2023, 6.5 % from October through December 2022, and 6.6 % from July through September 2022.

People aged 15 and over who live in urban areas’ CWS (Current Weekly Status) labour force participation rate climbed from 47.5 percent to 48.8 percent in April to June 2023.

It was 48.5% from January to March 2023, 48.2% from October to December 2022, and 47.9% from July to September 2022.

The term “labour force” refers to the segment of the population that provides or proposes to provide labour for engaging in economic activities for the production of goods and services, and as a result, both employed and unemployed people are included.

PLFS was introduced by the NSSO in April 2017. The Worker Population Ratio (WPR), the Labour Force Participation Rate (LFPR), the distribution of employees by broad status in employment, and the industry of work in CWS are all labour force indicators that are estimated based on the PLFS.

According to CWS, the labour force is the total number of people who were, on average, employed or jobless in the week before the survey date. The percentage of the population that is employed is known as the LFPR.

In urban areas, the WPR (in%) in CWS for those 15 years of age and over was 45.5% in April–June 2023, up from 43.9% in the same period the previous year.

In January–March 2023, it was 45.2%; in October–December 2022, it was 44.7%; and in July–September 2022, it was 44.54%.

The current quarterly bulletin, which covers the months of April and June 2023, is the 19th in the series.

The CWS unemployment estimates provide an average view of unemployment during a brief period of seven days during the survey period. According to the CWS method, a person is deemed jobless if they looked for or were available for work at least one hour on any given day during the period but did not work for even one hour on any given day throughout the week.

The government’s survey, conducted by the Ministry of Statistics and Programme Implementation, provided several insights:

• Sectorial Resurgence: The service sector, which had been one of the hardest hit, has shown signs of revival. Tourism, hospitality, and entertainment industries, which collectively employ a significant fraction of urban workers, have seen incremental job additions.
• Manufacturing Uptick: The ‘Make in [Country Name]’ initiative has begun bearing fruit. Local manufacturing hubs have started to absorb more of the workforce, attributing to the decrease in unemployment.
• Digital Transformation: A boom in the tech industry and increased demand for digital solutions post-pandemic have generated employment opportunities in urban areas. Start-ups in fintech, edtech, and healthtech have substantially scaled their operations.

• Skill Development Initiatives: Government-led skill development programs have played a pivotal role in matching job-seekers with relevant industry requirements.

While the overall figures seem encouraging, regional disparities persist. Some cities, especially tech hubs and economic centers, have witnessed much lower unemployment rates. In contrast, smaller urban areas, still recovering from the economic slump, have not fared as well.

A significant portion of the urban populace might be employed but not in roles befitting their qualifications or skill sets, leading to underemployment.A rise in gig workers, such as those associated with food delivery or ride-hailing apps, isn’t necessarily indicative of stable or long-term employment.

Rising living costs in urban areas might outpace income growth, leading to a decrease in real wages.It’s imperative to continue investing in urban infrastructure to attract businesses and promote growth.

Aligning educational curriculums with industry needs will ensure a steady supply of skilled workers.Sudden policy shifts can unsettle the business environment. Hence, consistent and forward-looking policies are essential.

Encouraging start-ups and small businesses can further bolster employment in urban areas.

while the dip to 6.6% unemployment is a positive development, a holistic approach is required to ensure long-term, sustainable economic growth and employment stability in urban areas. The government, along with private stakeholders, needs to act judiciously to harness this momentum.