Whalesbook
Latest labor statistics reveal a mixed picture of India's changing workforce. While figures from the 2025 Periodic Labour Force Survey (PLFS) show faster wage growth for women and more women entering formal salaried jobs, a closer look reveals ongoing structural inequalities and uneven distribution of economic gains.
Salaried Jobs: Faster Growth, But Gaps Remain
The PLFS data indicates that female earnings grew by 7.2% in salaried jobs, outpacing men's 5.8% growth. Women's representation in salaried roles also nudged up to 18.2% from 16.6% in 2024. This move to better jobs, often with social security benefits, shows positive progress for some women.
However, this faster growth doesn't mean equal pay. In salaried roles, women still earn 76% of men's income, a gap largely unchanged since 2022. The disparity is even larger in self-employment, where women earn just 36% of men's income, and in casual labor, where they earn 69%, despite a small improvement. This persistent gap, particularly in self-employment, remains a key challenge.
Informal Sector Slowdown Amidst Growth
Separate data from the 2025 Annual Survey of Unincorporated Sector Enterprises (ASUSET) shows a different story. The informal sector, employing most of India's workers, saw more businesses and jobs. However, its economic growth is slowing.
Wage growth in this sector plummeted to 3.9%, less than half the 13% recorded previously. Job creation also slowed considerably, adding 74.5 lakh positions in 2025 compared to 1.1 crore earlier. This slowdown in income growth for the informal economy is happening while India's overall GDP is expected to grow strongly (7.5% to 7.8%) in fiscal 2025-26. The difference in wage growth between the formal sector (9.2%) and the informal sector (3.9%) points to a growing economic divide.
Underlying Issues and Global View
Historically, gender wage gaps have been common across Indian labor markets, with women often in self-employment and informal sectors, leading to lower average pay.
A drop in the rural labor force participation rate in 2025 and a small rise in youth unemployment for women show that not all job market signs are improving. Globally, while some suggest India's pay gap is narrowing fast, other analyses indicate it could take centuries to reach gender parity, with progress varying by region and country.
The ASUSET data highlights structural issues in the informal sector, such as limited access to technology and credit, which hold back productivity and wages.
Looking Ahead
India's economic outlook for 2026 is positive, with steady growth and better hiring expected across sectors. However, trends from the PLFS and ASUSET data suggest economic growth benefits may not reach everyone equally.
The ongoing earnings gap between men and women, especially the large divide in self-employment, and the struggling informal sector, indicate that structural reforms are vital. These are needed to ensure faster wage growth for women leads to real economic equality and that the informal economy's potential contributes more to national prosperity.