Report: India's gender pay gap has narrowed, informality is soaring
The International Labor Organization (ILO) recently released its India Wage Report, and there are both positives and negatives to take from it. On one hand, the report revealed that while women continue to earn considerably less than men, the gender pay gap in India has narrowed. On the other hand, the report detailed alarming levels of informality and segmentation in jobs. Here's more.
What the report revealed about gender pay gaps
The report, which analyzed developments between 1993-94 and 2011-12, found that the gender wage gap had narrowed from 48% in 1993-94, to 45% in 2004-05, to 34% in 2011-12. While that's a good sign, women continue to be paid less among all types of occupations, and the gender pay gap of 34% remains alarming (and disturbing) when compared to international standards.
Urban gender pay gap is lower than in rural areas
"Female workers are paid a lower wage than their male counterparts in each employment category (casual and regular/salaried) and location (urban and rural), although the differences are smaller - on average - in urban than in rural areas," observed the ILO report.
Two-third of India's wage earners are casual laborers
Pointing out levels of informality, the report observed that 51.4% of total employed people in 2011-12, or around 206 million people were self-employed. Meanwhile, of India's 195 million wage earners in 2011-12, 62% or 121 million were employed as casual laborers. The report further noted share of contractual workers in the organized manufacturing sector had risen to 35% in 2011-12, from 14% in 1990-91.
Growing informality within the organized economy is a disturbing sign
"There is a fragmentation within the organized economy, where a growing proportion of regular/salaried workers seem to be informal without access to social security. The organized sector also continues to rely on the use of casual and contractual laborers in high proportions," the report noted.
While unorganized sector wages grew, there remains a considerable gap
Interestingly, the report also pointed out that while wages in the organized sector increased by 19% between 2004-05 and 2011-12, wages in the unorganized sector jumped by 52%. However, this shouldn't be taken as a heartening sign, given that the wage gap between the organized and the unorganized sector remained at a considerable 64% as of 2011-12.
Informality isn't surprising given patterns of urban growth
The rising levels of informality aren't surprising given patterns of urban growth in India between 2001 and 2011. While India's population growth fell, the number of 'census towns' in India tripled, and rural-urban migration into big cities overtook natural increase (births in cities) as a driver of urban growth, thus hinting at a deepening agrarian crisis pushing labor towards urban spaces.
The nature of rural-urban migration, low-skill employment, and informality
Rural-urban migration, of course, was largely driven by the availability of and/or the promise of myriad low-skilled/unskilled jobs in urban spaces, particularly in big cities. However, owing to many of these jobs being squeezed out through dependency relationships and social/community relations, rather than market mechanisms, informality increasingly became the norm as it exempted employers from having to be accountable for social security.