NITI Aayog member highlights wage stagnation amid rising employment
What's the story
Arvind Virmani, a member of the NITI Aayog, has flagged the stagnation of real wages in India despite an increase in employment.
He stressed that while more jobs are being generated than the population is growing, regular salaries have not kept up with inflation over the last seven years.
This disparity was flagged during an interview with PTI-Bhasha where he spoke about Periodic Labor Force Survey (PLFS) data.
Job market trends
Employment growth outpaces population increase
The PLFS Annual Report 2023-24 shows that the worker-population ratio for all ages rose to 43.7% in 2023-24 from 34.7% in 2017-18.
This data shows a major surge in employment over the last seven years, exceeding population growth during this time.
Virmani highlighted these findings to refute claims of no job creation, saying "the number of jobs is increasing more than the population growth."
Wage disparity
Wage stagnation in regular salaried jobs
Virmani noted that although the real salary of casual workers has risen in the last seven years, regular salaried jobs haven't seen the same increase.
He said, "But a bigger issue is in the case of regular salaried jobs. In this category, real wages have not increased in line with inflation in seven years."
This brings to light a major issue in India's labor market where inflation-adjusted wages for steady employment remain stagnant despite increasing employment levels.
Skills gap
Skill deficit impacting wage growth
Virmani pinpointed lack of skills as the main reason behind wages not keeping up with inflation. He emphasized that both central and state governments need to focus on skill development at all levels - lower, middle and higher - to tackle this issue effectively.
Productivity boost
Skill development vital for productivity and wage increase
Virmani stressed that increasing skills means higher productivity and real wages.
He said, "This is important because when skills increase, productivity increases and real wages increase."
To fully utilize India's demographic potential, he said we need better quality of education along with teaching and training.
He urged that attention needs to be paid here so we can reach a higher income level.