Wages rise in manufacturing as labour shortage bites

Industry leaders have recently highlighted a growing challenge in finding skilled labour, with tens of thousands of job vacancies remaining unfilled.

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This labour shortage, a persistent issue even before the pandemic, has been exacerbated as millions of workers returned to their hometowns during the health crisis and have yet to return to urban job markets.

According to a Business Standard analysis of data from two government surveys, this labour crunch is contributing to higher wages in the unincorporated manufacturing sector. Unincorporated business establishments, which include proprietorships, partnerships, self-help groups, and other forms of business not registered under corporate regulations, are particularly affected. The shortage of skilled labour has various roots. Before the pandemic, industries already faced challenges in recruiting adequately trained personnel. The onset of COVID-19 forced many businesses to shut down temporarily, prompting a mass exodus of workers from cities back to rural areas. Although economic activities have resumed, many of these workers have not returned, creating a significant gap in the labour market.