India’s Labor Market  

• Labor force participation is a low 400 million of a 1 billion population
• Organized employment has been stagnant at 30 million for thirty years (22 million public sector, 8 million private sector)
• Unorganized employment is the bulk of the labor force (370 million)
• Given 269 million people are below the poverty line, even the majority of those employed can barely sustain themselves
• Given India’s employment elasticity (0.15) and ICOR (3.75), the 8 million new jobs needed to freeze unemployment need an impossible annual GDP growth rate of 13.6% and investments of $125 billion. 
  
  

• Outsider bias; Labor laws are a prisoner of a vocal minority of organized labor (mostly not poor, middle-aged, men) against the majority (poor, low skilled, women, self-employed, young and unemployed)
• Two tiering; a tiny (but large scale) organized sector with low employment and a large (but small scale) unorganized sector with low investment.
• Unemployment, at 30 million, is more than organized employment
• The absence of job creation since 1990 has caused a dangerous absence of grassroots social and political support for economic reforms

• The coming unemployment explosion
• India’s labor environment
• Global trends in work
  
  

• Temp jobs form up to 10% of employment in some countries
• Improved employability; Globally 40% of temps find permanent jobs within one year
• The International Labor Organization reversed its fifty year old position opposing temporary staffing in 1997 (Convention 181)
• Temporary staffing accounted for 50% of the reduction in US unemployment and 11% of job creation in the EU in the 1990s
• A study of US firms found that earnings, margins and stock returns improved after the increased use of temporary staffing
• Temping gives outsiders (women, young, old, lower skilled, poor, unemployed, etc) labor market access