Employment Growth on the Rise, But Wage Growth Trails Inflation

Employment Growth on the Rise, But Wage Growth Trails Inflation

India is seeing a consistent increase in employment opportunities across various sectors. However, despite this positive trend, wage growth is failing to keep pace with the rising inflation.

Status of Stagnant Wages:

PLFS (Periodic Labour Force Survey) Annual Report 2023-24:

• Job Growth: The worker-population ratio rose from 34.7% in 2017-18 to 43.7% in 2023-24, indicating that job growth is outpacing population growth.
• Wage Disparity: While real wages for casual workers have increased, regular salaried employees have experienced stagnant wages due to inflation.

Economic Survey 2024-25:

• Corporate Profitability: Corporate profits reached a 15-year high in FY24, climbing by 22.3%. However, employment grew by only 1.5%.
• Stagnant Wages: Despite Indian companies maintaining a stable EBITDA margin of 22% over the last four years, wage growth has slowed, especially for entry-level IT positions.

Concerns:

1. Economic Slowdown: A higher share of corporate profits combined with stagnant wage growth could slow the economy by reducing consumer demand.
2. Income Inequality: The disproportionate rise in corporate profits, primarily among large firms, raises concerns about growing income inequality.

The Need to Balance Wage Growth with Rising Profitability:

Sustained economic growth relies on improving employment incomes, which directly contribute to consumer spending and stimulate investment in production capacity. To ensure long-term stability, it is crucial to achieve a fair distribution of income between capital and labor.

Tags : UPSC 2025 current affairs preparation, UPSC current affairs January 2025, UPSC 2025 daily current affairs, Best sources for UPSC current affairs 2025, UPSC 2025 current affairs for prelims, UPSC 2025 current affairs for mains, Important current affairs for UPSC 2025, UPSC current affairs strategy 2025, UPSC 2025 current affairs notes, UPSC current affairs PDF 2025, Current affairs for UPSC 2025 preparation, UPSC 2025 current affairs online classes, UPSC current affairs quiz 2025, How to study current affairs for UPSC 2025, UPSC 2025 current affairs magazines, Current affairs for UPSC 2025 prelims and mains, Current affairs updates for UPSC 2025, UPSC 2025 current affairs analysis, Current affairs for UPSC 2025 PDF download, UPSC 2025 current affairs important topics,