Coronavirus 2nd Wave, Lockdowns Wiped Off 73 Lakh Jobs From India: When Will This End?
As per the latest data provided, over 73.5 lakh jobs have been erased only in the month of April, including both, salaried and non-salaried segments.
Due to the plummeting cases of COVID-19 infections amid the second wave of the pandemic in the country, the labour market has crashed in April, marking a consequent third straight month of job losses and rising unemployment.
The increasing job losses is a direct consequence of the exploding Covid cases, causing business and travel curbs across the country.
73 Lakh+ Individuals Lost Jobs in April
According to data provided by the Centre of Monitoring Indian Economy (CMIE) on May 3, India witnessed job losses at a degree of at least 73.5 lakh jobs, in the month of April alone.
The cumulative count of salaried as well as non-salaried employees fell to 39.08 crore in April from 39.81 crore in March, recording the third consecutive drop in jobs, with 40.07 crore people employed in January.
According to CMIE, the employment rate fell from 37.56% in March to 36.79% in April , hitting a four-month low.
In addition to people losing jobs, the data showed that the number of unemployed people not looking for jobs have increased from 1.60 crore in March to 1.94 crore in April.
The national unemployment has risen up to 7.97% in April, compared to 6.5% in March and 6.89% in February, while that in urban areas have spiked from 7.27% in March to 9.78% in April.
Reason for Rise in Unemployment Rate
The second wave of the COVID-19 pandemic has put a sudden stop on labor force services, as business and travel across the country has halted.
Unlike the first wave of pandemic in 2020, the mass impact of the second wave fell all in once in April.
“While in 2020 there was a national lockdown, this time it was not a national one. The states and regions took charge and imposed partial or full curbs. In practice, it shrank economic activities, and instilled fear which is real due to the infection spread. The first place where you will see the impact is the labour market,” said Arup Mitra, a professor of economics at the Institute of Economic Growth, Delhi University.
Due to this, April witnessed a sharp drop in employment rates, which economists believe to be due to the closure of economic activity and a lack of appetite in the jobs market, states HT.
The fall in the number of people employed is massive and it encompasses regular salaried workers, casual workers and self-employed.
Additionally, the fact that in Creasing number of unemployed people are not looking for jobs, shows tat the severity of infection spread has reached rural India, resulting in job closures, causing lesser jobs there too.
“Look at formal sectors like retail, hospitality, tourism and travel industries, and look at informal and semi-formal segments workers who were in household jobs, office support systems, etc. They have gone down significantly in April,” added Mitra.
Current Employment Rate Better Than 2020
The managing director and chief executive of CMIE, Mahesh Vyas informed that while the current situation is witnessing Increasing unemployment rates, the number is far better than the unemployment rate witnessed in 2020, which almost touched to 24%.
Speaking on how long the given condition will persist, Vyas added, “I do not know about the peaking of the COVID wave, but I can see stress on the employment front.”
Labour economist, KR Shyam Sundar said that the upcoming two-three months will be crucial and the job market stability will depend on how well the crisis is managed.
He also added that despite a massive fall in labor force participation rate, the salaried jobs in urban India are not getting impacted, as businesses have now developed resilience and the attrition too, was high last year. Reducing headcount any more will affect operations and revenue of businesses.