Minority report: Unemployment rate among religious minorities up in 2023-24 | Economy & Policy News

High poverty despite high unemployment

At the outset, that may seem perplexing since the poverty rate in Muslims is much higher than others, as pointed out by the Rajinder Sachar Committee in the early part of this century. However, a deeper analysis explains the link between high poverty and low unemployment rate among Muslims.

Amitabh Kundu, who headed the post-Sachar Evaluation Committee, says Muslim poverty is much higher than the poverty among Hindus, particularly when one excludes the scheduled caste population.

The Sachar Committee had said that Muslims faced fairly high levels of poverty. Though dated, the committee had said that overall 22.7 per cent of India’s population was poor in 2004-05, with scheduled castes and tribes together as the worst off, at 35 per cent, followed by Muslims at 31 per cent.

As to why unemployment rate was the highest among Sikhs and Christians, Praveen Jha, professor of economics at the Jawaharlal Nehru University, explains that the “withdrawal effect” because of the vulnerability of jobs after Covid could be at play. “Segments of society that are economically better off wait for better employment opportunities in times of economic vulnerability. And Sikhs and Christians are certainly better off when compared to other minorities,” says Jha.

Disguised unemployment

Kundu, who is currently senior economist and Professor Emeritus at LJ University, Ahmedabad, says the existence of disguised unemployment lowers the unemployment rate for all communities in rural areas compared to urban. For instance, Muslims in urban areas have the least rate of joblessness among all religious segments.

Explaining the reasons behind this, Kundu says: “Generally, the poor will take up any job at much below the minimum wage, as they cannot afford unemployment… “This, to an extent, explains the lower unemployment rate for Muslims in urban areas compared to Hindus.”

The Sachar Committee had said the condition of Muslims on the whole was only slightly better than those of scheduled castes and tribes, though slightly worse in urban areas. Minorities have a higher rate of unemployment in the rural areas than the all-India level.

However, when it comes to unemployment among women in urban areas, Muslims have a lower rate than Hindus. Kundu attributes this to a large number of Muslim women not seeking employment. “Besides the poverty factor, sociocultural constraints could explain the reluctance of Muslim women in urban areas to actively seek jobs,” he says.

Reluctant job seekers

This hesitancy in job search is also reflected in the lower labour force participation rates (LFPR), which is the proportion of the population seeking employment. Since 2017-18, Muslims and Sikhs have had a lower LFPR compared to the national average.

However, the LFPR across religions has risen by more than 8 percentage points between 2017-18 and 2023-24. But the growth was less than 8 percentage points for only Muslims.

Most of those employed among Muslims are self-employed and a smaller proportion of them are in regular jobs. Here, household help are not taken into account.

In comparison, a larger proportion of Christians and Sikhs are in salaried jobs even though most of them here too are self-employed. The least proportion of employed are casual workers among Christians and Sikhs.

This is true even for Hindus. Christians and Sikhs have a higher proportion of workers in this category when compared to Hindus. In this respect, Christians have the best quality of jobs.

However, the share of regular wage employees saw a fall among all religious communities over the five years ended 2023-24. Muslims saw the steepest fall, while Sikhs witnessed the least decline.

About 21.5 per cent of the workers belonging to the Muslim community had salaried employment in 2019-20, but their share fell to 18 per cent in 2023-24, showing a 3.5 percentage point decline

In the case of Christians, 27.6 per cent of workers had regular jobs in 2023-24 compared to 29.9 per cent in 2019-20, down by 2.3 percentage points.

Regular workers in the Sikh community saw a 0.7 percentage point decline. As many as 26.7 per cent workers in the community had wage employment in 2023-24, down from 27.4 per cent in 2019-20.

In comparison, Hindus saw the least deterioration in the quality of employment. As many as 21.9 per cent workers had regular salaried jobs in 2023-24, down by 0.8 percentage points from 22.7 per cent in 2019-20.

Overall, a little over a fifth of workers had regular jobs. The share of those in wage-salaried employment declined to 21.7 per cent in 2023-24 from 22.9 per cent in 2019-20.

Link to literacy

There may be a broad link between the trend cited above and literacy rates. While literacy rates rose across communities over a five-year period, Muslims had the lowest rates of literacy in 2019-20 as well as in 2023-24. Hindus witnessed the least proportion of increase in literacy rates in this period.

The literacy rate among Muslims was up by 2.6 percentage points from 75 per cent in 2019-20 to 77.6 per cent in 2023-24. There were 79.6 per cent literate Hindus in 2023-24, up by 1.9 percentage points compared to 77.7 per cent five years ago. Meanwhile, literacy among Sikhs increased by 3.7 percentage points from 79.1 per cent in 2019-20 to 82.8 per cent in 2023-24.

Christians saw literacy rate rise to 87.6 per cent from 84.3 per cent over this period, registering a 3.3 percentage point increase.

Overall, literacy rate was up from 77.6 per cent in 2019-20 by 2.1 percentage points to 79.7 per cent in 2023-24.