The effects of lockdown around the world have adversely impacted the jobs sector tremendously.
Over 26 million people have already been declared unemployed in the US.
What is the situation in India?
The unemployment rate in India stood at 26.2% in the third week of April amid coronavirus lockdown, a CMIE report said.
Even before the novel coronavirus wreaked havoc, the jobs sector was reeling under stress due to the negative effects of demonetization and GST.
As mentioned in the ‘Economic Survey’, 93% of India’s labour force is employed by the informal sector. This constitutes the agricultural sector (56%) and other informal jobs such as construction workers, drivers, maids etc. Any enterprise having less than 10 people is considered to be a part of the informal sector.
This sector has now been impacted by the shutdown due to issues such as lack of food and shelter.
As of April, only one in every four working Indians were employed, according to data from the Centre for Monitoring Indian Economy (CMIE).
Mahesh Vyas, Managing Director and CEO, Centre for Monitoring Indian Economy (CMIE), said. “The employment rate has fallen from 40% in February to 26% now. This is a steep fall of 14 percentage points.”
“Fourteen crore people are expected to have lost employment in the lockdown period, he added.
The unemployment rate stood at 8.74% in March which was the highest since demonetization in 2016, a report by CMIE said.
Are only people from the informal sector losing jobs?
This crisis has also impacted the formal sector in many ways. Individuals especially those in the IT, Finance and Media are losing jobs due to lack of revenue generation as well as drying up of capital. This has threatened to even bring those in the formal sector into a state of poverty.
India is facing an employment crisis, even with high levels of GDP growth which is the phenomenon of ‘jobless growth’.
Except for industries catering to the essential goods, every other sector is suffering. Prices of essential items have risen due to problems in the supply chain. Any reduction in demand will only reduce employment in this sector.
Companies and businesses are facing the heat of the lockdown as pay-cuts and lay-offs have already begun.
Experts warn that the pandemic will result in more unemployed youth as new jobs dry up and existing ones shut down.