A nation of shopkeepers

New work force shifts are more complex than the restaurant and bar economy image suggests

N Chandra Mohan

Are burger-flipping McJobs expanding in India? Or is the country now a restaurant and bar economy? Or is it more a nation of shopkeepers? A lively debate on such questions has been triggered by the recent availability of survey data on the changing industrial distribution of India’s workforce during the 1990s. Such trends mirror changes in the nature and structure of economic activities in the Indian economy.

This debate so far has focused only on the booming employment in trade, hotels and restaurants to describe overall labour market trends during the 1990s. According to Ms Gail Omvedt, a restaurant and bar economy is represented by the burgeoning shops, hotels, restaurants and bars, servicing the middle classes and the rich, but employing the poor, including the rural poor, in new jobs outside of agriculture.

A broader picture is that although a significant section of the work force still is employed in traditional and technologically less-advanced forms of activity in the unorganised sector, the major factor of change during the 1990s is the growth of a relatively skilled and trained modern work force employed in tasks and in establishments that are characterised by new and higher levels of economic organisation.

As such trends are more evident in bigger cities and towns, this article only focuses on urban India between 1993-94 and 1999-2000. The survey data of the National Sample Survey Organisation (NSSO) for these two periods have been derived from Professor K Sundaram’s recent article on employment and poverty in India. The socio-economic changes suggested by NSSO data indeed are striking and require further research.

In line with economic development, there has been a sharp move away from agriculture during the 1990s. The interesting question is where such people who are migrating into the cities and towns are finding jobs. The popular view is that such migrants initially seek jobs in the big factories or government establishments, failing which they take up whatever is available such as casual labour or self-employment in the unorganised sector.
During the 1990s, such avenues of employment were still important in urban India. One quarter of the work force is absorbed in manufacturing activity, including repair services — which include traditional industries such as textiles, wood and leather, some of which have been conducted on a technologically less-advanced household basis. But these have sharply diminished in relative importance between 1993-94 and 1999-2000.

Employment in textiles thus has shrunk from 66 per 1,000 workers in 1993-94 to 56 per 1,000 workers in 1999-2000. In terms of occupations, this downtrend is most evident among spinners, weavers, knitters and dyers: their numbers dropped from 3.4 million to 2.7 million over this period. Next in importance within manufacturing are repair services whose numbers have remained unchanged at 25 per 1,000 workers during the 1990s.

Within manufacturing, however, there are signs that skilled and modern categories such as metal-processing workers gained strength. In terms of occupation, those engaged as machine workers, tool makers and operators thus rose in absolute numbers by 1.2 million during the 1990s. These gains, however, were not strong enough to offset the decline of opportunities in the more traditional industries like textiles.

For job seekers in urban India, manufacturing thus did not offer significant opportunities during the 1990s. Instead, more than half the incremental opportunities were in trade, hotels and restaurants. In absolute numbers, the number of such workers rose by 7 million-plus to account for less than a quarter of India’s urban work force in 1999-2000. Talk of burger-flipping and the restaurant and bar economy arose in this context.
This view is only partly valid as the bulk of growth in this sector is retail trade rather than hotels or booze shops. A nation of shopkeepers is a better description as the proliferation of retail trade outlets is a visible feature of change not just in the bigger cities but also smaller towns in urban India. In the bigger cities, retail trading in the form of shopping malls are evidence of growing size and organisational complexity.

Besides serving customers in retail shops, job seekers are also absorbed in the services sector. Around a fifth of India’s urban work force is in the services sector. Here again, traditional and low-productivity personal services are not growing at all. In absolute terms, there was a reduction in their ranks by close to a million during the 1990s. Occupations such as housekeepers, cooks and maids reflect this declining trend.

While such archetypes of the unorganised sector diminish in importance, the more modern ones in the services sector are in the ascendant. These include education and research, medical and health services. The share of the former has risen from 39 per 1,000 workers to 46 per 1,000 workers during the 1990s. In terms of occupations, this uptrend is observed for teachers and nurses, medical and health technicians in urban India.

After manufacturing, trade and services, employment is rapidly growing in the construction sector. The share of this sector has risen from 63 per 1,000 workers in 1993-94 to 79 per 1,000 workers in 1999-2000. In terms of occupations, bricklayers and other construction workers rose by 1.5 million over this period, which was perhaps one of the highest in urban India, followed by transport-equipment operators.

As in the case of shops, the most visible sign of change in urban India are people driving autorickshaws, taxis and buses. Transport, storage and communication services thus have risen from 79 per 1,000 to 87 per 1,000 workers during the 1990s. Most of the remaining changes in the industrial distribution work force do not suggest any significant transformations in the urban areas.

The overall shifts therefore are more complex than the one-dimensional descriptions of burger-flipping or the restaurant and bar economy in urban India. There are definite changes towards a modern economy despite the relative importance of traditional and technologically less-advanced forms of activity in the unorganised sector during the 1990s.