EPF data shows big drop in new workers joining formal sectors

The number of new workers who joined the formal workforce in March was the lowest in the last four months, payroll data of the Employees Provident Fund Organisation (EPFO) shows. It reflects how the job market was affected as the second wave of the pandemic hit the nation.

A total of 716,223 people joined the formal workforce in March against 807,482 in February, recording a fall of over 91,000.

Around 4.06 lakh net subscribers exited and then re-joined EPFO by switching their jobs within the establishments covered by EPFO and choosing to retain membership through transfer of funds rather than opting for final settlement.

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The data of exited members is based on the claims submitted by the individuals/establishments and the exit data uploaded by employers, whereas the number of new subscribers is based on the Universal Account Number (UAN) generated in the system and has received non-zero subscription.

The payroll data showed that more than 37% of the drop in new workers in March was in the crucial 18-25 age group. Members of this age-group are considered fresh hands in the market and signify a crucial stage for an individual’s potential in terms of earning capacity.

Age-wise data of payroll shows that the age-group of 22-25 has registered the highest number of net enrolments with around 3.14 lakh net subscribers, adding in the month of March, 2021. This is followed by the age-group of 18-21 with around 2.29 lakh net enrolments.

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Gender-wise analysis of the financial year 2021 reflects an upward swing in the ratio of net female subscribers’ addition to the total net additions, from the month of October, 2020 till March-end.

Among main industries, iron ore mines, courier services, restaurants, road motor transport, petroleum & natural gas refining, iron and steel and establishments engaged in manufacturing, marketing and digital interface have seen positive growth in terms of net member addition in March, 2021, compared to the net subscribers’ additions in February, 2021.

Experts said the payroll numbers for April and May could be worse due to intense lockdown in many states, especially in Maharashtra, Tamil Nadu and others.

“The new subscriber additions will face a huge crunch in the coming months especially April and May or even in June as many states have witnessed lockdown, low economic activity, production cut in sectors like auto and auto ancillaries and a dip in consumer sentiments,” said a labour economist.