Even as India’s unemployment rate has begun to soar in the midst of a nationwide lockdown, the burden of lost wages has a distinct skew.
The unemployment rate among the urban uneducated, for instance, shot up from 0.9% in January to 18.7% in March, according to monthly figures released by the Centre for Monitoring Indian Economy (CMIE). This is significant: since the less educated are often poorer, they remain in the workforce even in low-paying jobs—unless an economic shock upends normal life.
“This is insane. This almost never happens,” said Amit Basole, a labour market researcher at the Bengaluru-based Azim Premji University. “This is even worse than demonetization,” he added. “Economic recessions are slow and lumbering and come over many months. What we are living through is a different beast. This is unprecedented,” Basole said.
The monthly figures from the CMIE that were released recently also show a curious inversion. In urban India, unemployment among the uneducated is at a higher level than those with a graduate degree (13%), for the first time since early-2016 when the surveys began.
Insisting that India may have lost a lot of time already, Radhicka Kapoor, an economist at the Indian Council for Research on International Economic Relations, said: “There has to be some sort of immediate income support. Precision is not the need of the hour. Look at what the rest of the world is doing.”
The UK has announced that it would pay 80% of the wages of all workers, up to £2,500 per month. Denmark, Norway and several other countries have announced similar income support schemes.
Rathin Roy, a former member of the Prime Minister’s Economic Advisory Council (PMEAC), said: “The government needs to make available ₹2 lakh crore to spend. What else can you do.”
That the economic shock has disproportionately hit the semi and less-educated more is understandable, he said. “Most of them are employed in service sector jobs in construction, repair, or unorganized transport, all of which have come to a standstill,” Roy said.
arly estimates from CMIE’s weekly tracker, which Mint reported on Tuesday, indicate that at least 50 million Indians may have lost their jobs in the last two weeks. For comparison, the private agency’s jobs survey projected that the country shed 11 million jobs over the course of 12 months in 2018, making employment a key issue in the run-up to the 2019 parliamentary elections. Beyond the necessity to help those in immediate need, there is a larger economic reason for the government to step in, Basole said.
“If you don’t take good care of people when they are not doing work (while in lockdown), then they can’t come back to work. Let’s say they go into debt or the migrants don’t have enough money to come back to cities or small businesses sell off assets now to survive. Then, when the time comes to restart, they cannot restart,” he said. “We are about to find out what kind of an economy we are and whether we can bounce back.”
News Source: Livemint