URBAN EMPLOYMENT IN INDIA: TRENDS & TRAJECTORIES

1. URBAN EMPLOYMENT IN INDIA: TRENDS & TRAJECTORIES Marty Alter Chen Lecturer in Public Policy, Harvard Kennedy School International Coordinator, WIEGO Network “Inclusive Cities in India” Workshop June 7-8, 2011 New Delhi

2. REMARKS TODAY • Employment Challenge in India • Urban Employment in India • Exclusionary Cities = Threat to Urban Livelihoods • Inclusive Cities = Alternative Paradigm

3. OVERARCHING CONCERN India is a fast-growing economy BUT… • employment is not growing as fast as output • deep pockets of poverty persist • inequality is growing

4. UNDERLYING ASSUMPTIONS • The vast majority of the Indian workforce is informally employed, even in urban areas • Informal employment tends to be associated with lower earnings and higher risks than formal employment • Increasing earnings and reducing risks in the informal economy are key to reducing poverty and inequality • Yet exclusionary urban policies tend to decrease earnings and increase risks in the informal economy

5. EMPLOYMENT CHALLENGE # 1:QUANTITY OF EMPLOYMENT • Employment growth rate = 2.85% per annum (1999-2005) • < growth rate of unemployment (3.3% p.a.) • mostly in informal employment, including informalization of wage employment in the public and private sectors • Unemployment = very high among urban youth (15-20 yrs.) • 20% - young urban men • 30% - young urban women • Underemployment = real concern • common among informal workers – who represent 93% of total workforce + 80% of urban workforce

6. EMPLOYMENT CHALLENGE # 2:QUALITY OF EMPLOYMENT • Shift in Type of Employment • wage employment: on decline • self-employment: significant increase (52.5% of total employment in 2005-6) • Fall in Real Wages: from 1999 to 2005 • Low Self-Employment Earnings – aroundhalf of all self-employed in 2004-5 thought their work was not remunerative • 40% of rural self-employed – earned less than 1,500 rupees per month • 33% of urban self-employed – earned less than 2,000 rupees per month Source: NSS surveys cited in Ghosh et al 2007, Paul et al 2009)

7. URBAN WORKING AGE POPULATION (15+)2004-2005 (%) MaleFemaleAll Economically Active 79* 24** 54**Unemployed4 7** 4 Employed96* 9396* Economically Inactive 21 76 46 Notes: * = up 1 % point or less since 1999-2000 ** = up 2 % points or more since 1999-2000 Unemployed & Employed = percentage of Economically Active Source: based on data tabulations by G. Raveendran

8. URBAN EMPLOYED BYEMPLOYMENT TYPE, STATUS & UNIT2004-2005 (%) AGFEIEHHTotal Total Urban Employed 9 30 58* 3* 100 Formal4* 62 1 1 20 Informal 96 38** 99 99** 80** Urban Wage Workers 3 29 21 3* 55 Formal 5* 62 4 1 34 Informal 95 38* 96 99* 66* Urban Self-Employed 6* 2* 38** 0 45** Employers 4* 22* 5** 0 5* Own Account Workers 52 55 73 0 70 Contr. Family Workers 44* 23* 22* 0 25* Notes: AG = agriculture, FE = formal enterprise, IE = informal enterprise, HH = household * = up 1 % point or less since 1999-2000 ** = up 2 % points or more since 1999-2000 Sub-Categories = percentage of each Category Source: based on data tabulations by G. Raveendran

9. URBAN EMPLOYED (Male & Female) BYINDUSTRY GROUP & EMPLOYMENT TYPE2004-2005 (%) Male Female FI FI Agriculture <1 6 <1 18* Manufacturing 5 19 2 26* Home-Based 1 17 7* 70* Construction <1 9 <1 4 Trade <1 24 <1 10 Street Traders 2 12 0 20* Non-Trade Services 14 21 13 28* Transport 18 38 5 3 Domestic Workers 0 1 <1 28* Total Urban Employed 21 79 15 85* Note: F = formal, I = informal * = higher percentage of female, than of male, workers Sub-categories = percentages of Categories Source: based on data tabulations by G. Raveendran

10. THREATS TO URBAN LIVELIHOODS:EXCLUSIONARY URBAN POLICIES • Context: urbanization + urban renewal + de-industrialization of cities • Urban Livelihoods: • impacted by municipal policies, regulations, + practices – more so than national policies • overlooked or undermined by municipal authorities + urban planners • excluded from + eroded by urban renewal schemes • Key Urban Informal Groups – key threats to livelihoods • street vendors: bribes + confiscation of goods + evictions • construction workers: mechanization -> displacement • transport workers: bans on certain types of transport • home-based producers: lack of basic infrastructure services + single-use zoning regulations • waste pickers: lack of access to waste + exclusion from solid waste management

11. INCLUSIONARY URBAN POLICIES: PROMISING EXAMPLES • Street Vendors • Warwick Junction, Durban, South Africa – participatory, consultative process + infrastructure and technical support services to natural market of 6-7,000 vendors • India – Supreme Court judgment + national policy + recent Supreme Court ruling calling for national law • Waste Pickers • Brazil and Peru – national policies in support of waste pickers • India - National Environmental Policy (2006) + National Action Plan for Climate Change (2000) recognition of waste pickers’ contribution to environment/carbon reduction + right to collect and recycle waste • Pune Municipality, India - ID cards to waste pickers + contracts to waste pickers for door-to-door collection of waste

12. INCLUSIVE CITIES:GUIDING PRINCIPLES • India is a hybrid economy – both modern-traditional and formal-informal – and should remain so. • The contribution of the informal economy to both economic and employment growth should be recognized • Informal workers, activities, and units should be included in the modernization of the economy • Informal workers need to have representative voice in rule-setting and policy-making bodies • The size, composition, and contribution of the informal economy needs to be fully counted in official statistics and fully valued by policy makers

13. INCLUSIVE CITIES:VISION “The challenge is to convince the policy makers to promote and encourage hybrid economies in which micro-businesses can co-exist alongside small, medium, and large businesses: in which the street vendors can co-exist alongside the kiosks, retail shops, and large malls. Just as the policy makers encourage bio diversity, they should encourage economic diversity. Also, they should try to promote a level playing field in which all sizes of businesses and all categories of workers can compete on equal and fair terms.“ Ela Bhatt Founder, SEWA

14. INCLUSIVE CITIES:WHY? WHY NOW? • Why? • key pathway to reducing urban poverty + inequality • chance for India to distinguish itself • Why Now? • “window of opportunity” – in the wake of the global economic crisis • “moment of urgency” – fast-changing exclusionary cities

15. शुक्रीया धन्यवाद