Covid-19 impact: How safe is your job?
India Today Editor-in-Chief talks about the lack of job security created by the Covid-19 pandemic, in the May 11, 2020 edition of the India Today Magazine.
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Jobs are always the central issue in any economy. Elections are won and lost on unemployment figures. After all, they are about human beings. People have to earn money from jobs for the goods or services they first produce and then consume, which makes the wheels of the economy turn. The fear of the coronavirus spreading has led to a shutdown of large parts of the economy. The Centre for Monitoring Indian Economy (CMIE) estimates 120 million people have been rendered jobless in one month of the lockdown. Of the total 406 million people employed in the country, only 20 per cent, or 81.2 million people, are in the salaried class. While the pandemic won’t spare them either, the future will be grim for the remaining 324.8 million people who are either daily wagers, self-employed or small farmers. This is not an Indian problem alone. According to the ILO (International Labour Organization), four out of five (81 per cent) people in the global workforce of 3.3 billion are currently affected by full or partial workplace closures. It considers this the most severe crisis since the end of World War II.
India Today May 11, 2020 cover, How safe is your job?
The 40-day nationwide lockdown in India, which has kept over a billion people indoors and is the largest mass quarantine in human history, seems to have kept infections and deaths low as compared to the rest of the world but extracted a terrible economic price. The most optimistic of forecasts don’t see the Indian economy growing at more than 1.5 per cent this year — some estimates say growth may even be negative. Naturally, this will have an enormous impact on employment. Post corona, there will be three categories of jobs, those that will never come back; those that will be temporarily lost because of the slowdown in the economy and will return on its revival; and new jobs that will be created either in the same industries or in new ones. Multiple factors will be at play, some positive, others negative. The trends of automation and artificial intelligence will be accelerated. There will be a shift in global supply chains, both inwards and outwards. We might be heading toward a phenomenon which is being termed “gated globalisation”. Consumer behaviour will not be easy to predict.
At the moment, sectors such as aviation, travel, hospitality, real estate, automobiles, which depend on people travelling, staying in hotels, buying homes, cars and consumer goods, have fallen like ninepins. Other sectors like exports that are linked to global supply chains are withering away because demand has dried up. Unemployment rates have shot up from 6.7 per cent in mid-March to 23 per cent in the first week of April. Of the 40-60 million jobs in the retail sector, 11 million are likely to take a hit. More than 15 million jobs could be lost in India’s export sector as half of all orders got cancelled and units are unable to repay loans due to the Covid-19 pandemic and the ensuing lockdown. Employers cannot be expected to sustain their businesses if they are running at reduced capacity but having to pay the full workforce.
The other big concern is that India’s labour participation rate has been slipping, from 47-48 per cent before demonetisation to just 35.5 per cent following the six weeks of lockdown. It is still not clear that the lockdown will be lifted on May 3, several state chief ministers want it to be extended. What is fuelling anxiety is the uncertainty over how long the crisis will last. The head of an executive hiring firm put it pithily, “We don’t even know whether we are in the beginning, middle or end of the pandemic.”
More than any other event in recent history, the pandemic could create the largest Indian ‘precariat’. This portmanteau of ‘precarious’ and ‘proletariat’ refers to a class of people suffering an existence without predictability or security. As a continuing condition, this has consequences for the material and psychological welfare of the people and for social cohesion as a whole. This is a factor that should cause serious worry to governments across the world.
Our cover story, written by Executive Editor MG Arun and Deputy Editor Shwweta Punj, examines the Indian economy to ask the big question, ‘How Safe is Your Job?’ This is a question worrying millions across the country as it is enveloped by uncertainty, especially when we don’t have a social security net to cushion job losses.
Having somewhat tamed the virus, the government needs to send the following message to the district level where many crucial decisions are being made: that their performance will be judged not only by how much they have controlled the spread of the infection but by the extent of the economic revival they have been able to generate in their area. The government needs to be friends with industry and remove all obstacles to an economic revival. They need to announce an MGNREGA-type package for the urban poor. The bureaucracy should abandon its instinctive suspicion of business and instead act as a facilitator in reviving industry so that people get back their jobs. Covid deaths may be getting meticulously recorded, but there is no record of people dying of chronic hunger. This will be a silent killer with dire consequences. It is something we have to keep in mind and make economic revival a priority, otherwise, we will pay a heavy price.
(India Today Editor-in-Chief's note for the cover story, How Safe is Your Job? for May 11, 2020)