JOIN USBleak forecasts, cost-cutting mark COVID-19 recession
The spread of COVID-19 and the resultant lockdown have caused a widespread disruption in the global economy, the sheer scale of which is unprecedented in recent history. Over 190 million people across industries and sectors may lose jobs globally, nearly one-third of this is in India.
In the country, the pandemic has taken a significant toll on the economy and the job market, as the data from the Centre for Monitoring Indian Economy (CMIE) shows. Within a month of the lockdown, the unemployment rate shot up to touch a high of 25.88%, the worst in recent years. During the first two weeks of April, the unemployment rate hovered around 23% - 24%, with labour market conditions getting worse in the third week that ended on April 19.
Just about a quarter ago, companies across sectors were looking to hire people and had finalised their hiring plans for the FY21. However, one month into the lockdown, their plans have gone haywire and many organisations have withdrawn job offers, leaving thousands of soon-to-be graduates in the lurch. Many businesses have cut jobs, laid off employees, slashed salaries, and held back promotions.
Apart from the organised sectors, the pandemic has caused widespread misery for lakhs of migrant and gig workers – who have no permanent job or income – across the country.
According to Indian Staffing Federation (ISF), India is the fifth largest ‘flexi-staffing’ country and has created over eight lakh job openings between 2018 and 2019 in Bengaluru and NCR regions.
With the lockdown, a large number of workers across sectors like construction, manufacturing, drivers working for taxi aggregators, daily-wage workers, farm labourers, plantation workers and other informal workers who earn on a piecemeal basis have lost their jobs.
According to the International Labour Organisation (ILO), the full or partial lockdown measures are affecting 2.7 billion workers worldwide - four in five of the global workforce. “The rapidly intensifying economic effects of Covid-19 on the world of work are proving to be far worse than the 2008-09 financial crisis,” the UN labour agency said in a statement.
ILO estimates that the current crisis might wipe out close to 200 million full-time jobs across the world in the next three months.
Workers and businesses face catastrophe without urgent, coordinated measures by governments, the ILO said in a tweet.
The loss in jobs has not been limited to one sector, with several industries like aviation, travel, tourism, hospitality, manufacturing, oil & gas, automobile, construction, retail, micro, small and medium enterprises, entertainment and media industry, among others at risk.
According to initial trends analysed by ISF, anywhere between 10% and 15% of India’s working population across various industries is affected.
About 600 million of India’s 1.3 billion population go to work. Of this, about 530 million are employed in the informal sector and 70 million in the formal sector. Of the 70 million, 10 million are government employees, whose jobs are safe.