Jobs: Unskilled Workers Battle Despair In A Slowing Indian Economy

It’s half past 10 on a Thursday morning as a crowd gathers around a motorcycle-borne man. Scores of others sitting on pavement or standing in small groups look on in anticipation. “Kaam hai kya? Kaam hai kya (is there any work?),” some of the labourers around the biker enquire as more join the commotion. After some haggling, one leaves riding pillion and others retreat, mumbling in disappointment.

It was for a construction job at someone’s home. “The person who got picked up was ready to work for just Rs 250,” said an irked Shafiq Hussain, 45, a construction labourer, as he wiped sweat off his face with a scarf—that’s about half the official daily wage. “When you know you have a family to feed and rent to pay, you do whatever to get some work.”

Everyday 7:00 am onwards, hundreds of loaders, painters and construction workers and cleaners gather at Labour Chowk in Noida’s Sector 49, about 25 km east of Delhi, in search of work. But from school dropouts to 70-year-olds, unskilled workers are finding it increasingly difficult to get employment, conversations with job seekers revealed.

The number of people looking for work doubled over a year earlier to 1,500, leading to infrequent work and falling incomes. And the situation is not different at any of the several such job hubs BloombergQuint visited in the National Capital Region centred on Delhi.

The situation is grim at labour chowks—unofficial employment exchanges—at a time when the Indian economy is slowing and demand for everything, from shampoos and biscuits to cars, is falling. Automakers are battling the worst slump in a decade, forcing companies to stop hiring, cut costs and lay off workers. A liquidity crunch stemming from IL&FS crisis last September has stalled recovery of the real estate sector—one of the largest job creators. And the unemployment rate in India, where 12 million people join the workforce every year, is at a 45-year high.

Hussain, who moved to Noida two years ago with his wife and three children from Muzaffarnagar, Uttar Pradesh, told BloombergQuint that till last year, there was enough work for some savings. “I was easily able to make Rs 10,000-12,000 a month.” But last month, he said, he failed to earn even half that amount.

He hasn’t paid the rent on his house for two months. “For six months, work has been neither regular nor did it pay enough,” he said. “There is work for two days, and then nothing for the next 10 days.”

According to Centre for Monitoring Indian Economy, the trouble may be due to increased labour force participation. More people are looking for jobs and are coming to the labour market compared with last year when fewer workers moved to cities after demonetisation and the goods and services tax, Mahesh Vyas, head of the Mumbai-based think-tank, told BloombergQuint over the phone.

“During that period (after demonetisation) employment shrunk by 10 million jobs,” he said, adding labour is now returning to the market in hope of finding jobs.

Farmers and farm labourers are migrating from smaller towns to metropolises like Delhi NCR and Mumbai, lured by higher daily wages. BloombergQuint found that most of the workers in the labour hubs of Delhi NCR had migrated from West Bengal, Bihar, Uttar Pradesh, and Ahmedabad in Gujarat.

Delhi and Mumbai offer up to Rs 700, the highest daily wage for unskilled workers in India, according to data from the Ministry of Labour and Employment. The average daily wage in Noida, according to the ministry, is Rs 400-450.

Bapu, 33, a painter from Meerut, Uttar Pradesh, landed in Delhi two months ago in search for better income. He left his wife and seven kids behind but has earned only Rs 2,500 so far. Bapu, who only gave his first name, sleeps on the footpath everyday and joins 400 other people at Chandni Chowk’s Fatehpuri Labour Chowk every morning. “My family is waiting for money but I’m not getting any work here.”

Rahul Kumar, 30, who worked at an auto parts firms in Noida till three months ago, left the job as he earned Rs 7,000 a month. “The company had stopped overtime pay due to poor business and I wasn’t sure if they would keep me for long.” He has been scouting the labour hubs in search of daily jobs, but in vain.

Deshraj, 35, who’s been a regular at Noida’s hub for nearly a decade, said, “We hear more people are getting laid off and there are no jobs in factories. So everyone has turned towards labour chowks.”

The number of workers seeking jobs has nearly doubled to 800-1,000 in the last one year, while the number of jobs has dwindled, according to Vidya Ram, a daily wager from another Labour Chowk in Noida. “At least half the workers would get jobs last year,” he said. “Now, out of 800, less than 100 get work.”

Another reason for more workers searching jobs at labour hubs could be a shift in employment pattern.

Jobs are being created in sectors where workers have some skills, said Sudeep Sen, head of industrial, manufacturing and engineering verticals at staffing firm Teamlease Services Ltd. “Factories are looking for trained personnel, but don’t want too many of them as the market condition isn’t good,” he told BloombergQuint. “Jobs involving physical labour in infrastructure have moved to instrument handling,” he said.

Moreover, he said, the organised sector is reluctant to formalise workforce, forcing more people to frequent labour chowks.

Looming Crisis

The troubles of casual workers only confirm the stress in the Indian economy, already highlighted by multiple indicators like auto sales and consumer goods volumes. A recent survey by CARE Ratings, which analysed annual reports of nearly 1,000 firms, found that banks, insurers, automakers, and logistics and infrastructure firms were among the companies hiring at a slower pace. Only the services sector was showing some growth.

India’s industry bodies, in their meeting with Finance Minister Nirmala Sitharaman, have sought a Rs 1 lakh-crore stimulus to kickstart the investment cycle and boost the economy.

“The government needs to pay a lot of attention to the economy as a whole,” said CMIE’s Vyas. “While the situation isn’t a crisis right now, but slowly and steadily the job situation is getting worse.”

Sen agreed. It’s difficult to predict how long the economic turbulence will last, he said.

Hussain, meanwhile, waited at the Noida chowk till 6:00 pm but in vain—this was his ninth straight day without work. “Right now, I’m able to sustain on a loan, but I will have to repay it soon. This won’t last long.”