F1 comprises 9 lakh households. These are relatively low income households, median annual income is Rs. 100,000 and more than 80% of the households earn less than Rs. 3 lakhs a year.

 

Source: Mint 

 

 

 

Last week’s segment E8 included households whose chief wage earners are school educated skilled workers, in their older years living alone without their children. We swing down the years to younger school educated skilled workers, who are living with family – these chief wage earners may be single or may be married, but without children. This segment F1 comprises 9 lakh households, but with large household sizes, the population in this urban consumer segment is more than 33 lakhs. These are relatively low income households, median annual income is Rs. 100,000 and more than 80% of the households earn less than Rs. 3 lakhs a year. This is despite the fact that in half the households, there are two or more earning members. In these F1 households, the chief wage earner is very young, and with low education levels. A quarter are less than 25 years of age – the fact that they are shouldering the burden of the household at such a young age speaks volumes about the background of these households. Even when other members are earning, they are clearly not adding substantially to the family kitty, so these are households with low education and skills. Yet we find the education levels rise with the younger generation; seniors in these households would be those with barely any school, but all F1 chief wage earners have at the very least completed middle school and are eligible for training in some courses at the vocational institutes. 

These would be the fortunate ones amongst young low income households, compared to the G1 households, taken up in the very first of this series, where skilled workers who have just completed primary school share the same characteristics as unskilled workers. This is because those skilled workers who have only completed primary school would have learnt their skills from some informal source, the employment opportunities would be more limited and even in the unorganised sector, the lack of a basic 8th Std Pass certificate would keep a lid on their wages. Consumption levels and patterns would be similar between primary school skilled workers and unskilled workers within the G1 segment. If and when the Right to Education Act guaranteeing free and compulsory education till the age of 14 translates into actual delivery on the ground to all children even in rural areas, we can expect G1 households to shrink in size and merge with F1 households over the years. Though that could be sometime in the future, the F1 segment is set to grow in size. 

F1 households are split evenly amongst married and single chief wage earners. In any case, those who are married do not have children yet. There are children in many of these households but they would either be younger siblings, or relatives staying in the city to study. Spouses are by and large homemakers, and 14% have barely completed primary school. 

The majority of chief wage earners are in salaried jobs, their regular income providing much needed support in these households, where others are not adding as much. A third  are self-employed – these would include providing services like plumbing, electrical work, welding etc. The dominant sectors of employment are manufacturing and trade – mostly in small firms or businesses- 18% are employed by large private sector companies, government or public sector firms. Transport, communication, construction and real estate are the next sectors that draw in F1 chief wage earners. As far as asset ownership goes, these households are equally split between those who own their homes, and those in live in rented houses. Whether owned or rented, these houses would be small, the majority in India’s slums, a source of cheap labour for the cities. 

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