New Delhi, March 2: Arvind Virmani, a member of the Niti Aayog, highlighted significant trends in India's labor market, noting that while employment opportunities are growing, the real wages for regular jobs have not kept up with inflation over the past seven years.
In an interview with PTI-Bhasha, Virmani emphasized that despite fluctuations, the worker-population ratio in India has been steadily rising, suggesting that the number of jobs is increasing faster than population growth. This finding aligns with data from the Periodic Labour Force Survey (PLFS), which shows a clear upward trajectory in the workforce participation rate.
Growing Employment, But Stagnant Wages
According to the PLFS Annual Report for 2023-24, the worker-population ratio for individuals across all age groups has risen from 34.7% in 2017-18 to 43.7% in 2023-24, marking a significant increase. Virmani argued that this robust growth in employment contradicts claims that job opportunities are not expanding.
However, while employment figures are encouraging, the situation regarding wages tells a different story. "The real salary for casual workers has seen an increase over the past seven years, improving their conditions," Virmani said. "But a more concerning issue is the stagnation of real wages in regular salaried jobs, which have not kept pace with inflation during the same period."
The Skill Gap: A Major Roadblock to Wage Growth
Virmani pointed to the lack of adequate skill development as a key factor preventing wages from aligning with inflation. He stressed that India’s workforce is not acquiring the necessary skills for high-paying jobs. Drawing from international data, Virmani suggested that skill development should be prioritized at all levels, from schoolchildren to adults, to bridge this gap.
“The central government is taking steps in this direction, but states also need to focus on skills development at the district level,” he added. “The key to increasing wages lies in improving productivity, and that’s directly tied to skill enhancement."
Virmani also underlined the importance of equipping those who have already entered the workforce, as well as newcomers, with the right skills. "We need to focus not just on those aiming for cutting-edge fields like AI or electronic engineering but also on children who drop out of school early. These individuals must be provided with relevant skills for the job market."
Reforming Education and Training for a Skilled Workforce
Virmani further stressed that the quality of education needs to be improved at every level—from primary to higher education. He stated that this is critical to ensuring that the growing workforce has the skills needed to succeed in a rapidly changing global economy.
“India must leverage the global demographic opportunity we have,” he said. “Improving education, teaching, and training will be crucial in helping the nation reach higher income levels. Along with skill development, there’s also a pressing need to enhance the supply chain to ensure sustainable growth.”
He concluded by emphasizing the symbiotic relationship between skills and employment: "Job and skill are two sides of the same coin. Without skill, securing a job becomes much harder. It is important that we recognize and act upon this link."
Conclusion: A Path to Higher Wages and Productivity
In summary, Virmani’s insights reveal a complex labor market scenario in India. While job opportunities are growing, addressing the skill gap remains pivotal for ensuring that wage growth aligns with inflation and supports broader economic progress. Improving the quality of education and skills development at all levels will be key to tapping into India’s full potential on the global stage.
In an interview with PTI-Bhasha, Virmani emphasized that despite fluctuations, the worker-population ratio in India has been steadily rising, suggesting that the number of jobs is increasing faster than population growth. This finding aligns with data from the Periodic Labour Force Survey (PLFS), which shows a clear upward trajectory in the workforce participation rate.
Growing Employment, But Stagnant Wages
According to the PLFS Annual Report for 2023-24, the worker-population ratio for individuals across all age groups has risen from 34.7% in 2017-18 to 43.7% in 2023-24, marking a significant increase. Virmani argued that this robust growth in employment contradicts claims that job opportunities are not expanding.
However, while employment figures are encouraging, the situation regarding wages tells a different story. "The real salary for casual workers has seen an increase over the past seven years, improving their conditions," Virmani said. "But a more concerning issue is the stagnation of real wages in regular salaried jobs, which have not kept pace with inflation during the same period."
The Skill Gap: A Major Roadblock to Wage Growth
Virmani pointed to the lack of adequate skill development as a key factor preventing wages from aligning with inflation. He stressed that India’s workforce is not acquiring the necessary skills for high-paying jobs. Drawing from international data, Virmani suggested that skill development should be prioritized at all levels, from schoolchildren to adults, to bridge this gap.
“The central government is taking steps in this direction, but states also need to focus on skills development at the district level,” he added. “The key to increasing wages lies in improving productivity, and that’s directly tied to skill enhancement."
Virmani also underlined the importance of equipping those who have already entered the workforce, as well as newcomers, with the right skills. "We need to focus not just on those aiming for cutting-edge fields like AI or electronic engineering but also on children who drop out of school early. These individuals must be provided with relevant skills for the job market."
Reforming Education and Training for a Skilled Workforce
Virmani further stressed that the quality of education needs to be improved at every level—from primary to higher education. He stated that this is critical to ensuring that the growing workforce has the skills needed to succeed in a rapidly changing global economy.
“India must leverage the global demographic opportunity we have,” he said. “Improving education, teaching, and training will be crucial in helping the nation reach higher income levels. Along with skill development, there’s also a pressing need to enhance the supply chain to ensure sustainable growth.”
He concluded by emphasizing the symbiotic relationship between skills and employment: "Job and skill are two sides of the same coin. Without skill, securing a job becomes much harder. It is important that we recognize and act upon this link."
Conclusion: A Path to Higher Wages and Productivity
In summary, Virmani’s insights reveal a complex labor market scenario in India. While job opportunities are growing, addressing the skill gap remains pivotal for ensuring that wage growth aligns with inflation and supports broader economic progress. Improving the quality of education and skills development at all levels will be key to tapping into India’s full potential on the global stage.
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