Zero Salary For 12 Crore Blue Collar Indian Employees; Travel, Food Sectors Worst Hit
In the wake of the Covid-19 pandemic, about 100 to 120 million blue-collar workers, accounting for over 70-80% of the industry, have gone without income in the past month due to the nationwide lockdown imposed staffing agencies and businesses.
How Is This Affecting?
According to the experts tracking the sector, the jobs are also expected to nosedive in the remaining quarters of the year unless demand picks up by the festive season later this year.
The co-founder of Betterplace, which connects blue-collar workers with companies, Pravin Agarwala said, “The slowdown started around mid-March and only around 2-3 crore (20-30 million) people now have their employment intact,”.
Basically, travel, hospitality, tourism, aviation, retail, outdoor entertainment, food, beverages and the real estate sectors have been hit the most, staffing agency TeamLease said.
Additionally, automotive, non-essential fast-moving consumer goods, poultry, dairy, shipping and construction will also feel the impact in the short- to medium term, TeamLease said.
What Does Exper Say?
According to the co-founder of TeamLease, Rituparna Chakraborty “These sectors are bound to see the repercussions…we haven’t yet witnessed the peak, given most formal sector employees saw their wages by and large being paid in full and on time during the lockdown,”.
He further added “More challenges will come up after the lockdown is lifted. For informal sector workers who were left without livelihood since the beginning of the lockdown, it has been a daily battle,”.
Who Got Affected?
Mostly, contract employees are paid by the hour, but during the lockdown, they have earned next to nothing.
Since businesses shut down, drivers, delivery staff, sales and business development employees have been handed pink slips overnight, with between one to three-month severance packages.
Apart from that, the new-age startups like business-to-business e-commerce platform Udaan, food-delivery app Swiggy, social commerce venture Meesho and logistics firm BlackBuck, which have terminated contractual employees over the last few weeks, even traditional sectors have been laying off staff.
The president of workforce management, Quess Corp Limited, Lohit Bhatia said, “Gig workers are hit badly without assured minimum wages, social security in their arrangement. It may impact attracting new personnel to gig work a lot more, making hiring difficult. The revival of jobs will happen from Q2 in some least impacted sectors, to Q3 for slightly more impacted, and last for the tourism-based economy,”.
So far, the gig economy workforce, part of the blue-collar segment, including shared mobility and e-commerce staff, has seen incomes decline by 60-70%.
The services marketplace companies employees, such as UrbanClap and Swiggy said businesses were restarting slowly but demand is down by 40-50%.
Further, the experts said, in the absence of a pick-up in demand by Dussehra, the number of staff will either stay stagnant or go down further by year-end.
Later in the year, it is expected the demand will pick up, but companies will find it difficult to hire migrant workers as most of them are waiting to return to their hometowns, said Agarwala of Betterplace.
Also, the pressure is directly affecting staffing agencies who employ contract workers.