October , 2021
2020: Impact of Pandemic on Employment
17:33 pm

Dr. Abhishek Kumar Pandey

The government had imposed a lockdown to curb the spread of the Covid-19 pandemic but this impacted economic and commercial activities and resulted in job loss. It also resulted in the exodus of migrant workers - which rocked the entire nation. According to the Centre for Monitoring Indian Economy (CMIE) data, the unemployment rate was recorded at 6.9% in February 2021 which was 7.8% in the same month of the last year and 8.8% when the lockdown was imposed. It has been observed that during the lockdown in India, about a 100 million people lost jobs. Though many were back at work by December 2020 but around 15 million workers remained unemployed. As per a report from CMIE, for an average household of four members, the monthly per capita income in October 2020 (Rs.4,975) was still below its level in January (`5,989). These are the important findings of the study –

1.    Job losses were higher for states with a higher average Covid case load. Maharashtra, Kerala, Tamilnadu, Uttar Pradesh and Delhi contributed disproportionately to job losses.

2. During the lockdown and in the months after, 61% of working men remained unemployed and did not return to work. 47% suffered a permanent job loss during the lockdown - not returning to work by end of 2020.

3. For women only 19% remained employed and for working women, the burden of domestic work increased without any corresponding relief in house spent in employment.

4.  As a result of unemployment and income losses, the labour share of GDP fell by over 5 percentage points from 32.5% in the second quarter of 2019 - 2020 to 27.5% in the second quarter of 2020 - 2021. Out of the aggregate declining income, 90% was due to reduction in earning, while 10% was due to loss of employment.

5. Younger workers were much more impacted.

The pandemic has taken a heavier toll on poorer households. In April and May, the poorest 20% of households lost their entire incomes. In contrast, the richer households suffered losses of less than a quarter of their per- pandemic incomes. After the lockdown, workers came back into more precarious and informal forms of employment. Nearly half of formal salaried workers moved into informal work - either as self-employed (30%), casual wage earners (10%) or informal salaried (9%) workers. 

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