COVID-19 effect on Employment in India

The COVID-19 pandemic has pushed the world into an unprecedented crisis and
uncertainty, calling to expedite the implementation of the Centenary Declaration. It
called upon constituents to pursue ‘with unrelenting vigour its [ILO] constitutional
mandate for social justice by further developing its human centred approach to the
future of work’. It called for putting workers’ rights and the needs, aspirations and
rights of all people at the heart of economic, social and environmental policies. The
international community and ILO’s constituents have engaged in a collective
endeavour to tackle the devastating human impact of the pandemic, but more is
needed.
Women are marginally more likely than men to be in non-regular employment. Thus,
COVID-19 has increased vulnerability of women employment and has further added
care work responsibilities in this time. Women’s labour participation numbers were
declining even before the pandemic with the increased engagement of women in
education and with domestic duties not being classified as ‘work’. The rapid
assessment estimates that together, 181 million people in households, mostly
women, engaged in domestic duties or unpaid family businesses, are bearing the
brunt of the increased care and work burden.

COVID-19 has also exposed the vulnerability of urban casual workers, many of
whom are migrants. They were among the first to be jolted by the lockdown
measures as economic activities were halted threatening survival of many small
urban units and jobs of these workers. In most urban units, the jobs are linked with
accommodation at the workplace and the unemployment may have forced these
workers to vacate their shelters as well. With little choice, they are forced to return to
their village in desperation. With limited data available on inter-state migration and
employment in informal sectors, it is difficult to figure the numbers of migrants who
lost jobs and accommodation during the pandemic and returned home. However,
using different available data sets, they are at least five million or possibly much
higher, as per ILO’s rapid assessment.
According to the report of Centre for Monitoring Indian Economy (CMIE),only a little
over one-fourth (27.7%) of the total working age population (15-59 years) of 1003
million, i.e. 285 million people were working in the week after the lockdown (the
corresponding last figure before lockdown being 404 million. This shows that within
the two-week period of lockdown, 119 million workers have lost their jobs. If we
assume half of those who have lost their jobs are main or single earning family
member of an average of 5-member family size (as per census 2011) households,
around one-third (60 million households or 300 million people) of India’s people or
households, could be facing a severe livelihood crisis and around 227 million
households are in despair.
Understandably, this indicates that the current nationwide lockdown has been the
biggest job-destroyer ever in history. However, these estimates only reveal the
impact on jobs during the lockdown period, and should not be considered as
permanent loss of livelihood. Many of them may be able to get back to employment
after the lockdown would be over. However, it is true that many of them would also
not be able to get their jobs back, such as informal workers who were involved in
casual or contractual work and those who returned to their villages. However, the
CMIE survey has many caveats as it is based on telephonic interviews with a smaller
sample and likely to have high probability of error in estimation. So, the other
national level estimates also examined for the comparison such as the national level
Periodic Labour Force Survey to understand the likely impact on informal workers
during and after the lockdown period.

According to the PLFS, about 90 % or 419 million of the total 465 million workers are
engaged in the informal sector with 95%, and 80% in rural and urban areas
respectively. In magnitude, the informal workers in rural areas.This is primarily
because a large number of informal workers are engaged in farm or agricultural
activities (62%) in rural areas compared to only 8% in urban areas. Therefore, 92%
informal workers engaged in the non-agriculture sector in urban areas are likely to be
impacted more by the lockdown due to halt in economic activities in cities such as
industrial and business activities. In this article, we estimate the number of most
vulnerable informal workers by three ways

(i) the most affected sectors;

(ii) status of work and

(iii) vulnerable occupations, where they are engaged in urban areas.

In urban areas, about 93 million informal workers are involved in five sectors that are
most affected, namely, manufacturing (28 million); trade, hotel and restaurant (32
million); construction (15 million); transport, storage and communications (11 million);
and finance, business and real estate (7 million).

Of these, the casual workers are the most vulnerable due to the irregular nature of
their work and daily-wage payment, which are highest in the construction sector. So,
all these regular salaried or contractual employees, those who are currently not
working, and skilled workers and petty shopkeepers who may be sitting idle at home
or return to their native places or staying in shelter homes may not be able to recover
their jobs once the lockdown period is over. Added precautions like social distancing,
contact tracing, and strict health controls over entry at the workplace and market
would also impact the employer-worker relationship, thereby proving to be a huge
departure from the casual business as usual approach.

The preliminary results showed that loss of employment was considered as the most
severe immediate impact of the crisis while lower economic growth and rise in
inequality were probable long-term impacts.
As per the survey, the immediate policy priorities suggested were protection of
workers and families, short-term employment creation and income transfers to
affected workers.
There has been about a 25 per cent decline in total GDP with the industrial sector
(especially MSMEs) highly disrupted and down by 54 per cent.
While demanding sufficient protection for the workers from all sectors, in terms of
exposure to the virus and their incomes and working conditions, ILO calls for setting
a strategy for the medium and longer term to address declining demand and speed
up the recovery. It asks for prioritizing incomes and decent work to stimulate demand
and productivity and protecting existing rights and working conditions.

COVID-19 reminds the world why international institutions like the ILO were created
in the first place. The ILO Centenary Declaration on the Future of Work, agreed in
2019, 100 years after the Organization’s foundation, states in its preamble,
‘persistent poverty, inequalities and injustices, conflict, disasters and other
humanitarian emergencies in many parts of the world constitute a threat to those
advances and to securing shared prosperity and decent work for all’.