This essay discusses the various ways through which the pandemic has affected the lockdown, the crisis that the labour market faces, and suggestions laid by various people on how to combat the serious effects of the same.
The Coronavirus pandemic and the pandemic induced lockdown have brought the world into a standstill, affecting different sectors and sections of the society adversely. All major industrial and working sectors of the economy have been badly hit by the outbreak of the epidemic. The workers of different international companies to those working in small shops have been facing the direct consequences of the same.
Threat to jobs in informal and formal sectors
An observation by the National Sample Survey and Periodic Labor Force Surveys say that almost 136 million jobs are at risk, at present. The International Labor Organization (ILO) says that the pandemic will result in the loss of more than 25 million jobs worldwide. This risk of job loss will affect all sectors of the labor market, mostly affecting small scale and contract laborers. The situation of the ongoing pandemic and lockdown is very new to the world and thus it will naturally take time to adjust with the effects of the changes in every aspect of the world, especially in the labor market.
The lockdown has severely hit not only the urban economy but also the agriculture sector to a deep extent. With a significant decrease in the market spaces available for selling products, the farmers are facing a tough time to sell off the already harvested crops. The labor associated with different kinds of farming such as vegetable farming, poultry farming and rice cultivation is thus facing a significant shortage in income, thereby affecting their livelihoods directly.
The laborers engaged with the informal sector are assessed to be the most vulnerable to the aftereffects of the situation. According to the Periodic Labor Force Survey (PLFS), a total of 419 million laborers are engaged in the informal sector, with a higher participation in the rural areas than in the urban areas. Different informal sectors such as manufacturing, construction, food and accommodation, retail and wholesale, are going through a significant reduction in production, which adversely affects their income and the labor wages they offer. The ILO analyzes that the effects of the lockdown on these sectors alone will affect 37.5% of workers globally.
The Indian construction sector, which is one of the prominent ones in the country and employs a huge percentage of interstate migrants, had come to a literal standstill during the complete lockdown. The migrant worker population was found to be totally helpless, devoid of money and food. As a result, different governments had to relocate them into camps and provide them with food. With a partial lifting of the lockdown, the migrant laborers had started heading back to their birth states, and the future of their employment poses a huge question to their livelihoods. The Centre for Monitoring Indian Economy’s report put forward a relevant observation on the scenario. Only 28% of the total working-age population was working in the weeks after the lockdown, which is much behind the figure of 40% laborers before lockdown. This clearly shows that within the two-week period of the pandemic induced lockdown; around 119 million workers around the country have lost their jobs! The CMIE also points out that the economy which was already experiencing a slowdown and increasing unemployment rate has further gone into deep distress with respect to the labor market as a result of the pandemic, thus making COVID-19 outbreak the largest job-destroyer in the country.
The daily wage workers are observed to be threatened by job loss for an extended period. They are small shop salespersons (13 million), construction laborers (7 million), manufacturing sector laborers (3 million), transport workers (2 million), domestic helpers (4 million), restaurant service workers (3 million), painters and cleaners (3 million), stall and market salespersons (2 million), street vendors (2 million) and garbage collectors (1 million). A significant number of people who have lost jobs might be the only breadwinners of their families, and the distress thereby throws a huge number of families into severe poverty. Micro-entrepreneurs and the self-employed belonging to the informal sector would be affected significantly. Employment of the lockdown had also affected the restaurant business sector severely, across the country, due to a huge decline in tourism and due to guidelines passed in connection with social distancing. The world is going through a total economic turmoil, thereby re-writing the economic scenario globally. Many of those who were earlier running small enterprises or small-scale businesses might come out of the pandemic period without capital left to restart businesses.
However, informal sector jobs are not the only ones to be found unstable. Over 40% of the salaried jobs need not essentially be secure. A lot of them are devoid of contracts and the concern of whether the employees will hire them back remains a question. Temporary workers and newly – hired workers might also be affected quite negatively by the pandemic induced lockdown. Older workers, who find it difficult to find jobs even under normal circumstances, might find it more difficult to find job opportunities under the newly emerged health risk factor of COVID 19 virus. On the other hand, younger workers, whose job opportunities are more sensitive to fluctuations in demand, will find the situation tough too. According to the ILO, women, who make up 70% of jobs in the healthcare sector, and are also over-represented in the informal service sectors and in labour-intensive manufacturing sectors need to be given special attention with regard to employment. The threat to employment affects the whole economy like a chain, as different sectors of the economy are in one way or the other connected with several others.
Different International companies are already planning to decrease the number of employees by a great extent. A lot of people who work abroad have already lost their jobs and are trying to get back to their native country, for reasons like health security. Significant effect on the total income and economic stability will, therefore, affect the labourers of every sector, both formal as well as informal.
Read: What is Unemployment
Solutions devised to fight the situation
Suggestions on how to fight the great instability that the labor market faces as a result of the pandemic are being discussed widely. Different economists and policymakers have put forward various opinions with respect to making the lives of employers lee miserable, as the instability in the labor market is expected to continue for a longer time.
The ILO has come up with a four-pillar policy framework to fight the situation.
- Pillar 1 is about stimulating the economy and employment. It reiterates the need for active fiscal and monetary policies and about the need to lend financial support to specific sectors like the health sector.
- Pillar 2 talks about the need to support enterprises, jobs and incomes by extending social support towards everyone, by implementing employment retention measures and through providing financial, tax and other relief for enterprises.
- Pillar 3 is on protecting workers in the workplace, by strengthening OSH measures, adapting work arrangements, preventing discrimination and exclusion and expanding access to paid leaves.
- Pillar 4 says about the need to rely on social dialogue for solutions. It says about the need to strengthen the capacity and resilience of organizations of workers and employers, the capacity of governments, social dialogue, collective bargaining and labour relations institutions and processes.
It is high time for various institutions like government and international organizations to help the devastated laborers belonging to different economic sectors, by devising useful economic relief packages and by supporting them in socio-economic fronts. Families of the workers, which might consist of members from different age groups, should also be taken into consideration while arranging for relief. It should also be made sure that room for more employment is created and the economy is improved.