19 Jan 2024 : Daily Answer Writing

Q1) “The changes in labour market and employment pattern in recent years have opened up new avenues of economic empowerment, but have also created new problems.” Substantiate this statement with examples.

ANSWER

• Factors such as the emerging digital economy and the Covid-19 pandemic have created new possibilities for empowerment as well as new set of problems for the labour market.
• Changes in labour market and employment pattern have opened new avenues of economic empowerment in the following ways:

1. Low-skill jobs: The gig economy and platform-based models are creating jobs for semi-skilled and unskilled people through short-term contracts in roles like delivery agents. As per NITI Aayog’s report titled ‘India’s Booming Gig and Platform Economy’, India’s gig workforce is expected to expand to 2.35 crore by 2029-30.
2. Remote work: The pandemic-induced shift to remote work has enabled people to work from anywhere, breaking down geographical barriers and creating job opportunities for people who were previously limited by location. This has led to a more diverse and inclusive workforce and increased job opportunities for people in rural areas.
3. Women-friendly Policies: The shift towards more flexible work arrangements like work from- home along with women-friendly policies like 26-week maternity leaves has enabled women to balance their work and personal life better. This has also helped improve female labour force participation rate (LFPR).
4. Entrepreneurship: Push from government to turn young people from ‘job-seekers’ to ‘job-givers’ through schemes like Start-up India, Stand-up India, PM Mudra Yojana etc. and ease of doing business initiatives have helped to create a start-up culture. Today, India has the third largest start-up ecosystem in the world, with 104 unicorn companies.

At the same time, the changes in labour market and employment pattern have also created the following new problems:

1. Informalisation of labour: Gig economy and platform-based work is criticised for furthering informalisation of the labour market. E.g., no job security, long working hours, and lack of social security measures like provident fund, health insurance, etc.
2. Challenges of remote work: Remote work has created challenges like social isolation, lack of supervision, moon lighting, and disturbed work-life balance. Issues such as increase in divorce rates have come to light.
3. Gender Discrimination: Gendered statutory requirements such as maternity leaves dissuade companies from hiring women. Women face a ‘glass-ceiling’ in their career. In crisis, women are the first to be laid off as seen during Covid-19 pandemic. They are also an easy scapegoat for failures (glass-cliff effect).
4. Job displacement: Artificial Intelligence-based solutions such as ChatGPT could make several skill-sets irrelevant. The emerging digital economy might suffer from low employment elasticity of growth.

The policymakers and employers must work together towards addressing emerging issues in the labour market so that the emerging employment patterns are socio-economically inclusive.

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