Turning the spotlight on the urban poor 

The India Employment Report (IER) 2024, a collaborative effort by the Institute for Human Development and the International Labour Organization (ILO), sheds light on trends in India's job market, particularly about the equitable distribution of benefits from economic growth. 

Key Findings of the Report

• Despite a 5.4% average real economic growth rate between 2015-16 and 2022-23, the report raises questions about whether these benefits are reaching the working class.
• The report highlights a significant difference in employment and income patterns between urban and rural areas. Urban areas boast higher average monthly earnings but also face a higher unemployment rate. (e.g., 4.8% unemployment in urban areas vs. 1.5% in rural areas in 2000)
• The report highlights a growing trend of self-employment, particularly in urban areas. The share of self-employed individuals (including businesses) increased from 38.7% to 41.3% for males and from 34.5% to 44.8% for females between 2000-19.
• While self-employment is rising, real monthly wages for most categories have declined. (e.g., self-employed: ₹7,017 to ₹6,843; regular workers: ₹12,100 to ₹11,155 between 2012-19) An exception is casual workers (including labour), whose real monthly wages have increased (₹3,701 to ₹4,364 between 2012-19).
• The report suggests a potential rise in low-earning petty businesses in urban areas, particularly slums. Despite a decrease in income inequality within slums (2012-2019), this coincides with a general reduction in income levels, potentially pushing the urban poor deeper into poverty.
• The report underscores the need for policy measures to address the challenges faced by the working class, particularly in urban areas. This could include Public support programs for affordable food and gainful employment opportunities and Focus on rural development, specifically the non-farm sector, to create alternative employment avenues and potentially reduce migration pressure on urban slums.

2. Urban Poverty

Urban poverty refers to the economic condition where individuals or households in urban areas experience low-income levels, limited access to basic services, inadequate housing, and reduced opportunities for social mobility.

Economic Struggles

• Slum dwellers often lack access to formal education and training, restricting their employability to low-skilled manual labour or informal work.
• Jobs in the informal sector often lack stability, social security benefits, and fair wages. This can lead to income insecurity and difficulty meeting basic needs.
• Urban areas generally have a higher cost of living compared to rural areas. Housing, food, and transportation can be significant burdens for the urban poor.

Social Issues

• Slums are often characterised by overcrowding, poor sanitation, and a lack of basic infrastructure. This can lead to health problems, social tension, and vulnerability to natural disasters.
• The urban poor may struggle to access quality healthcare, education, and social safety nets, further perpetuating the cycle of poverty.
• Marginalization and discrimination can be faced by the urban poor, leading to a sense of isolation and a lack of voice in decision-making processes.

Impact on Individuals and Families

• Poor living conditions and inadequate healthcare access contribute to higher rates of illness and malnutrition among the urban poor.
• Children in slum communities may face challenges attending school due to financial constraints or the need to contribute to household income. This can limit their future opportunities.
• Slum communities can be breeding grounds for crime and violence, further jeopardizing the safety and security of residents.

Breaking the Cycle of Poverty

• Governments can play a crucial role by investing in affordable housing, education, healthcare, and skills development programs targeted towards the urban poor. 
• Microfinance and social enterprise initiatives can empower slum dwellers by providing access to credit and creating sustainable livelihoods.
• Supporting resident-led initiatives that address local needs and promote social cohesion is essential.

• Survey Methodology: The writer and their team surveyed 37 slums across various parts of Kolkata in 2012, revisiting these slums in 2022-23. However, only 29 slums were trackable due to redevelopment or eviction. Data was collected from 513 slum households in 2012 and 396 in 2021-22. Additionally, data from 2019, the pre-COVID-19 year, was gathered to analyze trends from 2012 while avoiding the COVID-19-affected years of 2019-22.
• Stability of Major Occupations: Throughout the decade, the primary occupations in Kolkata's slums remained largely unchanged. Approximately a quarter of the working population engaged in unskilled labour, which emerged as the most stable and significant occupation in these areas. This finding aligns with the IER 2024, which indicates that a similar proportion of workers in India were involved in unskilled work during this period.
• Shifts in Employment Composition: While unskilled labour maintained its prevalence, there were notable shifts in other occupations. The share of employment in skilled and semi-skilled labor decreased by 6%, and in private organizations by 3% between 2012-19. Conversely, there was a 9% increase in employment in petty businesses or small shops. Surprisingly, the share of other self-employed individuals declined by 3%.
• Emerging Occupations: Certain occupations experienced a surge in popularity over the past decade. Employment in truck driving and cleaning increased by 5%, while construction and related work saw a 4% rise. Notably, employment in construction and related work was minimal in 2012, indicating a significant shift in occupational preferences and opportunities over the years.

• A comparison between our survey data and the IER 2024 reveals a notable rise in casual work, particularly labour-intensive jobs, driven by increasing wages. However, casual work often lacks adequate work conditions and social security benefits.
• Casual work, while offering increased wages, is characterized by sub-standard work conditions and lacks social security measures. This trend contrasts with the rising self-employment in businesses, which hasn't seen a proportional rise in income, indicating a surge in low-earning petty business owners within slums.
• Despite overall rising trends in female workforce participation in urban areas, slum women have not experienced similar advancements. This disparity contributes to the challenges faced by urban poor households.
• Reduction in income inequality has paradoxically led to falling incomes, pushing the urban poor deeper into poverty. This situation challenges the notion that higher urban incomes compared to rural areas automatically translate to economic mobility and better work quality for the urban poor.
• Given these challenges, there is a crucial need for enhanced public support in urban areas. This includes measures to ensure access to affordable food and create opportunities for gainful employment, especially for vulnerable populations such as slum dwellers.
• The declining trend in male migration during 2000-08 can be attributed to several factors, including the slower growth rate and negative employment growth in agriculture, forestry, and fishing sectors compared to other sectors during 2000-19.
• Considering the slow growth and negative employment trends in traditional rural sectors, there is an urgent need to focus on rural non-farm sectors to create sustainable employment opportunities and improve economic conditions in rural areas.