Top 10 per cent workers pocket 70 per cent labour income in India: ILO

Chennai: Around 70 per cent of the total labour income is taken home by the top 10 per cent of the employees in India, while only 40 per cent of the employees have jobs matching their education.

India is among the lower-middle income countries which have less number of employees in jobs that match their level of education. India also has wider pay gaps, with the top 10 per cent of the workers taking away a high share of the total income of companies, finds the International Labour Organisation.

In India, 39.6 per cent of employees have a job which matches their education, which is lower than the average of 43 per cent for lower-middle income countries. In the case of the US, the share of employees having jobs matching their education is 55.3 per cent and in the UK too it is 55.2 per cent. In Russia 60.2 per cent of employees have matching jobs.

According to the International labour force survey data on the level of education and occupations of all employed workers in over 130 countries, the ILO estimates that only about half of these workers hold jobs corresponding to their level of education. The remaining employees are either overeducated or undereducated for their jobs.

Workers in higher income countries are more likely to hold jobs that match their education level. In high income countries, this is around 60 per cent of the employed. The analogous shares for upper-middle income countries are 52 per cent and lower-middle income countries are 43 per cent.

In low-income countries, only one in four workers hold jobs corresponding to their level of education. These observations suggest that the rate of matching job increases with countries’ level of development.

Further, ILO also finds that countries with very low matching rates tend to have wider pay gaps. This is especially pronounced in low- and lower-middle-income countries, where fewer than 30 per cent of the employed hold jobs matching their education and around 10 per cent of workers receive more than 50 per cent of total labour income.

In India’s case, 69.4 per cent of the total labour income is taken away by the top 10 per cent of the workers. This is lower at 33.1 per cent in the US and 32.4 per cent in the UK. The pay gap is still lower in Russia at 25.7 per cent.

Some of the countries which are closer to India in terms of matching education and pay gap are Zambia, Nicaragua and Nepal.