Kerala has in many ways been a model state for the rest of India. The southern state has consistently topped literacy levels, and human development indices. But despite these large strides, Kerala continues to have one of the highest unemployment rates in the country.
A recent report by the Kerala State Planning Board finds that employment in the organised sector has declined by 4% over a period of 15 years. The 2016 Economic Review states, “Persons employed in organised sector decreased from 12.26 lakh in 2000 to 11.75 lakh in 2016…The reason behind the downfall is due to the surfacing of informal sector.”
In the case of the unorganised sector, 37.7% workers are employed, observes the State Planning Board’s report.
The state’s recent report is consistent with the Annual Employment-Unemployment Survey 2015-16 conducted by Ministry of Labour and Employment, which found Kerala topping the unemployment rate among major states. The state’s unemployment rate is 12.5% against the all-India level of 5%, making it the third highest in the country after Sikkim and Tripura.
Among the districts, the 2016 Economic Review notes that Ernakulam has the highest employment in the organised sector with 2.28 lakh persons employed. This accounts for 19% of the state’s total employment. Wayanad district recorded the lowest employment with only 27,000 persons employed, accounting for 2.3% of the total population.
High unemployment among the youth
The Economic Review goes on to state that the unemployment rate among the youth is high in Kerala with 21.7% youngsters without a job in rural areas, while the figure is at 18% in cities and towns.
“The youth unemployment is prevalent in Kerala because young people lack adequate skills, and work experience in emerging areas,” the 2016 report says.
The number of job seekers have also declined over three years. While there were 44.99 lakh people registered on the employment exchange on December 31, 2012, that number saw a reduction of over 8 lakh people, with 36.57 lakh registered in at the end of 2015.
This may be on account of the declining placements on the state’s employment exchange, which fell from 12,643 in 2010 to 10,303 in 2015 and further to 7,875 as on September 30, 2016. The Economic Review states, “Reduction in placement may be due to temporary posts either being filled up on daily wage/contract basis or being kept vacant.”
High migrant labour
And while Kerala’s employment opportunities remain poor, the migration of domestic labour to the state has increased over the years. Government data shows that there were almost 25 lakhs Domestic Migrant Labourers (DML) in Kerala in 2015, while unofficial figure is pegged at 30 lakh.
The Economic Review notes that this is because the average daily wage rate in Kerala is nearly double the average daily wage in India.
Solutions to unemployment
Kerala’s State Planning Board concludes that “an entrepreneur culture” must be fostered to increase the employment rate.
“The State needs to create a conducive environment for the industries to thrive and encourage the growth of MSMEs as a driver of industrialization in the State. Traditional industries need to be strengthened and appropriate promotional strategies needs to be devised. The potential of the labour force also needs to be adequately tapped so that its productively is enhanced,” says the Economic Review.
Speaking to The News Minute, D Dhanuraj, Chairman of the Think Tank Centre for Public Policy Research notes, "State reports are mainly based on people who register in employment exchanges. Usually people register in employment exchanges and then end up working in the unorganised sector or go to another state or country for work.”
He explains that as a result computing unemployment data is challenging. “We cannot say that employment is so low Kerala because it is obvious that its income generation is high Even in the case of migrant labourers, there are lot of variations in the data available. Nobody have done a detailed study or data collection on this regard yet," he observes.