Salaried employment rises in Gujarat

There has been an extraordinary improvement in employment in Gujarat in the past year. Gujarat recorded its highest ever employment of 26.7 million during September-December 2022. In comparison, employment in September-December 2021 was 25.9 million. This increase in employment in Gujarat can broadly be characterised as an increase in salaried employment. Also, there is a noticeable shift from farming to other occupations like salaried employment, small traders and wage labourers, and self-employment.

Between September-December 2021 and September-December 2022, there was a remarkable increase in salaried employees in Gujarat, by around 0.9 million. During this period, the number of business persons increased by 0.45 million, small traders and wage labourers by 0.2 million, while the number of farmers declined by 0.76 million.

In September-December 2022, around 31 per cent of the workforce in Gujarat was small traders and wage labourers, closely followed by salaried employees who had almost a 30 per cent share. Farmers accounted for 25.5 per cent of the employment and business persons comprised a relatively smaller share of 13.8 per cent.

Before the pandemic, the workforce of Gujarat was distributed roughly equally between three main occupation groups — farmers, small traders and wage labourers, and salaried employees. During September-December 2019, farmers accounted for a little over 30 per cent of the employment in Gujarat. This was the largest form of employment in the state. Small traders and wage labourers came in second, accounting for 29 per cent of the employment. At 27.6 per cent, salaried employees also comprised a significant share of the workforce in this period.

Business persons comprised a much smaller share of employment in the state. Only around 12.7 per cent of the employment in Gujarat in September-December 2019 was made up of business persons. Before the pandemic, Gujarat’s labour market constituted a mix of employment in the agrarian sector, precarious jobs in the form of wage labour as well as better quality salaried employment. In recent times, however, there has been a marked shift in this employment structure.

In Gujarat, the pandemic impacted small traders and wage labourers the most. Employment of small traders and wage labourers fell from 7.1 million in September-December 2019 to 4.8 million in May-August 2020. Their share in the workforce fell to 22.4 per cent from 29 per cent in this period. Correspondingly, there was a dramatic rise in the share of farmers in Gujarat, as they were least impacted by job loss during the pandemic. It increased from 30.4 per cent in September-December 2019 to 36.8 per cent in May-August 2020. This shows that farming was seen as a strong fallback employment option.

Since September-December 2021 we see a consistent decline in number of farmers in the workforce. At the same time, there has been a corresponding rise in employment in other occupation groups like business persons, salaried employees and wage labourers.

Between May-August 2022 and September-December 2022, there was a sharp increase in the number of business persons in Gujarat’s workforce. Around half a million business persons entered the workforce in September-December 2022. This resulted in a total of 3.7 million business persons in the state — the highest number since 2019. This occupation group comprised 13.8 per cent share in employment during September-December 2022. This is a big increase compared to the 12.7 per cent share three years ago.

Salaried employees and people employed as small traders and wage labourers comprise a large share of employment in Gujarat. They collectively account for 61 per cent of the employment. Both these occupation groups have witnessed sizable expansion in September-December 2022. Salaried employees in Gujarat have been soaring since January-April 2021 and pinnacled in September-December 2022. These increased from 6.9 million in January-April 2021 to 7.3 million in January-April 2022, and further to almost 8 million in September-December 2022.

This upward trend in salaried employment is certainly a cheery outcome for Gujarat as it suggests an improvement in the quality of jobs in the state. Salaried employees could include jobs as managers, white-collar professionals or clerical employees, industrial workers and so on, who enjoy a certain level of income stability.

Gujarat has the largest share of its workforce employed as small traders and wage labourers. This occupation group accounted for 30.8 per cent of employment in the state during September-December 2022. The number of small traders and wage labourers in Gujarat fell from 7.9 million in January-April 2022 to 7.35 million in May-August 2022. Subsequently, it shot up to 8.2 million in September-December 2022 as a result of an addition of around 0.9 million small traders and wage labourers during this period.

From being the largest form of employment in the state before the pandemic, farming declined substantially, and consistently too, over the past year. The number of farmers dropped from 7.6 million in September-December 2021 to 6.8 million in September-December 2022. In September-December 2022, farmers accounted for around 25.5 per cent of employment in the state. This is an astonishing fall of 11.3 percentage points in its share compared to the pandemic period of May-August 2020.

Clearly, the labour market of Gujarat is witnessing a shift away from farming as the largest employment occupation. The shift is towards salaried employment, wage labour as well as business. On the bright side, there is a significant rise in salaried employment over the past year as compared to small traders and wage labourers. Salaried employees increased by 0.9 million between September-December 2021 and September-December 2022, while wage labourers increased by around 0.2 million. This is a highly favourable outcome for Gujarat.