Out of all the mayhem prevailing in the country, one of the areas to be focused upon, now, is the loss of jobs. According to the Centre for Monitoring Indian Economy (CMIE), more than 1.5 crore citizens of India, or 15.3 million Indians have lost their jobs because of the second wave of Covid-19 in the month of May, and around 97% of households’ incomes have been declined since the beginning of the pandemic last year. Adding this number with the ones in April, which was around 7 and a half million, we have approx. 22 million jobs lost in the second wave of Covid-19.
“We found out that the numbers were deteriorating regularly in the month of May; the deterioration had been witnessed every week. And, in May 23rd, we saw that the unemployment rate in rural areas had shot up to 14.7%, and urban to 17%. When we saw these numbers and its deterioration, we tried to translate the impact of these numbers in terms of jobs. We expected at least 10 million loss of jobs in the month of May. While, by the end of the previous month we were hoping things to be improved, but they didn’t, and hence we found the final numbers to be rising up to 15.3 million, ”CMIE CEO Mahesh Vyas said.
On being asked if it’s expected to get worse before it gets better, he further said, “I don’t expect it to get any worse now; I think the worst is behind us. Firstly, the numbers for the last week of May weren’t as bad as the previous week. Secondly, the 30-day moving average has also inched a bit downscale. So, it isn’t rising anymore, as it seems. One of the reasons behind it is that the Kharif crop is expected to be good this year, so people will necessarily go back to farming activities, while regaining their source of employment. The pandemic, and the fear of it, too, have started to plummet a bit. So, things are improving on the margin; they aren’t great, but isn’t getting any worse either.”
A large proportion of the jobs that have been lost in these two months is informal. When a lockdown is imposed, it clamps down on people’s mobility. As a result, when hawkers, plumbers, masons and the likes can’t stand on the curb looking for work, it basically signifies deposing scads of people out of work who are informally employed and are daily wage labourers. Out of 22.7 million jobs that are lost in April and May, 2021, 17 million are of the daily wage earners. This is, certainly, of a fairly high proportion, similar to which happened in April-May, 2020. This is a replay of the previous scenario. 5 million jobs that are lost, are by the small scale entrepreneurs, the people running small factories or companies. At the same time, there were gains witnessed in the agricultural sector with the preparations of the Kharif crop, which began in May.
The report, too, mentioned that there has been a steady secular decline in salaried jobs. What happens is, whenever there has been a lockdown, daily wage earners lose their jobs immediately. As a result, many of them move to the firms, and we see an increase in famers. Salaried jobs, on the other hand, are lost when either enterprises shut down or scaled down. Slowly and steadily, since April of 2020, we have been witnessing the salaried jobs being lost, a steady fall, especially in the rural areas due to the MSMEs shutting down. When medium enterprises were shut down, blue-collared workers, and other salaried employees working in those enterprises lost their jobs along with it. Moreover, the tourism and hospitality industry in India is an already known sector for the tremendous loss of jobs during this ongoing pandemic. Hence, salaried jobs are being lost persistently. The economic hit that we have been witnessing is also due to the industries not investing in it, owing to the lockdown or slow down. The existing ones are shrinking; larger companies are acquiring the market share of the smaller companies, and the smaller companies which are more labour intensive are shutting down. So, salaried jobs, at the lower end, essentially in smaller and medium enterprises are slowly and steadily, but regularly shrinking.
“It’s important for us to save our salaried jobs, if you’re losing them, it’s very bad for the economy, the households, and that’s what matters the most in the economy. The economy is the people, and if the households are losing good quality jobs, it’s a terrible news to begin with. Even if employment comes back, if it does in the form of gig workers, it isn’t fruitful. It’s a fashionable term today, but isn’t good for the economy. So, it’s very important to save salaried jobs,” the CEO said.
To understand this in a simplistic manner, effectively, when a person has a salaried job, he/she can avail the benefits such as, paid leave, health insurance, sick leave, provident fund etc. If one fine day he loses his job, and decides to work, say as an Uber driver, which, although, would technically be counted as having a ‘job’, there won’t be any security or benefit in this particular job, as opposed to the salaried one which had these perks. Hence, with no salaried jobs in the household, his entire family is bound to be more vulnerable, in terms of bad health, hospitalisation, family savings etc.
Moreover, in terms of new vacancies, what happened to all those young men and women who graduated in 2020? They couldn’t find jobs, there were none in the market. Many of them said that they would continue studying, or would sit at home doing nothing. What will happen to those who will graduate in 2021? We need to take cognizance of the fact that there are two cohorts – the young men and women who graduated in 2020 and 2021, who would compete for jobs together with the ones in 2022, if it becomes available in 2022. Imagine the mayhem in the labour markets, how competitive it will be! What’s depressing alongside it is the society and its unnecessary surveillance and expectations in people’s lives and existence. If one doesn’t get a job, he/she is blamed, and not the economy. They say ‘you didn’t get a job because you didn’t study or prepared hard enough.’ Mental stress will be persistent on people with no jobs, without households’ and society even recognising that there is a macro economic crisis that has fallen upon us, which is causing people not getting jobs.