Pandemic and Indian unemployment in perspective | Pakistan Today

Pandemic and Indian unemployment in perspective

  • The young and women have suffered disproportionately

More than one in six young people have stopped working since the onset of the coronavirus pandemic while those who remain employed have seen their working hours cut by 23 percent.  The current covid-19 economic crisis is hitting young people harder and faster than any other group. Young people have to face many hard situations, including disruption to education and training, employment and income losses, and greater difficulties in finding a job. The International Labour Organization uses the term “lockdown generation” to describe young people facing multiple shocks from the covid-19 crisis, including increased vulnerability to anxiety or depression.  In the USA too “nearly 7.7 million American workers younger than 30 are now unemployed and three million dropped out of the labour force in the past month.” One in three young workers is now unemployed, the highest rate since the USA started tracking unemployment by age in 1948. Among these young people, nearly 40 percent worked in retail and food service industries, where younger workers are typically the first let go and often the last rehired. The situation is even worse for people of colour. An effective way to solve this problem is rigorous testing and tracing of coronavirus infections. In countries with strong testing and tracing, the average fall in working hours has been shorter when compared with countries that don’t take those measures. Testing and tracing can promote public confidence, encourages consumption, supports employment, and helps minimize operational disruption at the workplace.

India has a jobs bloodbath as the unemployment rate shoots up to 27.1 percent. Scenes of migrants fleeing urban centres like Delhi and Mumbai only confirmed the long-held concerns on their employment as the economic activity came to a grinding halt. The government has so far announced income and food support to the vulnerable people as part of a Rs 1.70 trillion fiscal stimulus to the economic, financial and possibly humanitarian crisis, and is also mulling a second round of measures soon

In 2019, the youth unemployment rate was 13.6 percent, a figure already higher than in any other group. Almost 267 million young people worldwide are not employed, studying, or undergoing training. Those who were employed are also more likely to take informal jobs such as low-paid occupations, part-time jobs, or as migrant workers.  The covid-19 pandemic is bringing unprecedented challenges in its wake. All governments should take effective measures to help this group. Guy Ryder, the ILO Director-General has rightly said, “If we do not take significant and immediate action to improve their (youth) situation, the legacy of the virus could be with us for decades. If their talent and energy is side-lined by a lack of opportunity or skills, it will damage all our futures and make it much more difficult to re-build a better, post-covid-19 economy.” Besides this, the economic downturn is likely to hit young women the hardest. A previous ILO report shows that 41 percent of women are employed in sectors at high risk of job losses, compared with 35 percent of men. Informal female workers are under greater threat. Society should be aware of how covid-19 is exacerbating challenges women habitually face. Promoting gender equality rights can play a key role in returning to normal.

Labour market conditions improved in May as a number of people returned to work, despite the unemployment rate remaining “very high” at 23.5 percent, thinktank Centre for Monitoring Indian Economy (CMIE) said. A total 21 million jobs were added in May, and the labour participation rate improved significantly, CMIE said. The latest data on unemployment from the private sector think-tank comes days after the country entered the fifth phase of a nationwide lockdkown to curb the spread of the coronavirus pandemic, which has battered an already-slowing economy in a big blow to businesses and workers. Of the 21 millionjobs added in May, 14.4 million constituted small traders and wage labourers who account for a third of the total employed population. As the economy has been opening up gradually in parts of the country, this predominantly self-employed class is returning to their businesses.

As the economic situation improved slowly “A number of people who had left the active labour markets in April returned back in May. People who had left the labour market in April because of large-scale job losses had parked themselves in the passive unemployed category in May, many of them were back and actively looking for work,” as said by Mahesh Vyas, managing director and CEO of the Mumbai-based think-tank. The addition of 21 million jobs marked growth of 7.5 percent over April, whereas the jobs of small traders and wage labourers jumped 39 percent. The country’s unemployment rate stood at 23.5 percent in May 2020, which is the same rate recorded in the previous month. However, the labour participation rate– the total number of people currently employed or in search of a job– improved from 35.6 percent to 38.2 percent, and the employment rate improved from 27.2 percent to 29.2 percent, as per an estimate.

The latest official data shows that the country’s gross domestic product (GDP) expanded 3.1 percent in January-March, reflecting only the partial impact of the COVID-19 lockdown on the manufacturing and services sectors. With that, the annual expansion in the GDP stood at 4.2 percent in fiscal year 2019-20– the lowest pace of growth in 11 years. The covid-19 crisis has led to a spike in the country’s unemployment rate to 27.11 per cent for the week ended May 3, up from the under 7 per cent level before the start of the pandemic in mid-March, accordingly to the CMIE. The rate of unemployment is also not equal in rural and urban areas. The thinktank said the rate of unemployment was the highest in the urban areas, which constitute the most number of the red zones due to the covid-19 cases, at 29.22 per cent, as against 26.69 per cent for the rural areas. Analysts have been warning about the spectre of unemployment ever since the country was put under a lockdown on March 25 by Prime Minister Narendra Modi to arrest the spread of the virus infections.

India has a jobs bloodbath as the unemployment rate shoots up to 27.1 percent. Scenes of migrants fleeing urban centres like Delhi and Mumbai only confirmed the long-held concerns on their employment as the economic activity came to a grinding halt. The government has so far announced income and food support to the vulnerable people as part of a Rs 1.70 trillion fiscal stimulus to the economic, financial and possibly humanitarian crisis, and is also mulling a second round of measures soon. Experts often rue the absence of a good gauge of jobs in India, which is predominantly an unorganised-sector led economy. CMIE’s weekly series of data pointed to a steady increase in unemployment since the start of the covid-19 pandemic in India, with the week to March 29 showing the sharpest spike to 23.81 percent. As of the end of April, Puducherry in South India had the highest rate of unemployment at 75.8 percent, followed by neighbouring Tamil Nadu at 49.8 percent, Jharkhand at 47.1 percent and Bihar at 46.6 percent. Maharashtra’s unemployment rate was pegged at 20.9 percent by the CMIE, while the same for Haryana stood at 43.2 percent, Uttar Pradesh at 21.5 percent and Karnataka at 29.8 per cent. Hilly states had the lowest incidence of unemployment as of April, the think tank said, pointing out that the rate in Himachal Pradesh stood at 2.2 percent, I in Sikkim at 2.3 percent and in Uttarakhand at 6.5 pe cent.



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