Covid-19 impact: 195 mn full-time workers may lose jobs globally, says ILO

Huge losses are expected across different income groups, especially in upper-middle income countries (7 per cent, 100 million full-time workers), said the ILO.

The coronavirus pandemic is expected to erase 6.7 per cent of working hours globally during July-December, 2020 - equivalent to 195 million full-time workers, which far exceeds the effects of the 2008-09 financial crisis, the International Labour Organization (ILO) warned on Tuesday.

Large reductions are foreseen in the Arab states (8.1 per cent, equivalent to 5 million full-time workers), Europe (7.8 per cent, or 12 million full-time workers) and Asia and the Pacific (7.2 per cent, 125 million full-time workers).

Huge losses are expected across different income groups, especially in upper-middle income countries (7 per cent, 100 million full-time workers), said the ILO.

"Workers and businesses are facing catastrophe, in both developed and developing economies. We have to move fast, decisively, and together. The right and urgent measures could make the difference between survival and collapse," Guy Ryder, ILO's Director-General, said in a statement.

ALSO READ: Around 80,000 jobs expected to be cut due to coronavirus lockdown: Report

The sectors most at risk include accommodation and food services, manufacturing, retail, and business and administrative activities.

The eventual increase in global unemployment during 2020 will depend substantially on future developments and policy measures.

"There is a high risk that the end-of-year figure will be significantly higher than the initial ILO projection, of 25 million," said the ILO report titled "LLO Monitor 2nd edition: COVID-19 and the world of work".

If unemployment rises, youth may explode in anger, says Chidambaram

The sliding economy is an even greater threat to the country, the former finance minister said in a series of tweets.

BS : Senior Congress leader P Chidambaram on Tuesday attacked the Modi government over the state of the economy, saying if unemployment rises and incomes decline, there is a danger of youth and students "exploding in anger".

"The nation is engrossed with the anti-CAA, anti-NPR protests. Both present a clear and present danger," Chidambaram said.

The sliding economy is an even greater threat to the country, the former finance minister said in a series of tweets.

"If unemployment rises and incomes decline, there is the danger of youth and students exploding in anger," he said.

Chidambaram also attacked the government over the rising consumer price index (CPI) inflation.

Retail inflation jumped sharply to 7.35 per cent in December 2019, surpassing the RBI's comfort level, mainly due to high food prices, government data showed on Monday.

The retail inflation based on Consumer Price Index (CPI) was 2.11 per cent in December 2018 and 5.54 per cent in November 2019.

"The circle of incompetent management is complete. Mr Narendra Modi's government started in July 2014 with CPI inflation at 7.39 per cent. In December 2019, it was 7.35 per cent," Chidambaram said.

"Food inflation stands at 14.12 per cent. Vegetable prices are up 60 per cent. Onion prices are over Rs 100 per kg. This is the 'achhe din' promised by the BJP," he said.

Demonetisation, 3 years on: A look at impact on key sectors of the economy

With three years of data available to back or reject the various assertions and assumptions, Business Standard looks at the Modi govt's most disruptive economic measure, the 'note ban'.

On November 8, 2016, Prime Minister Narendra Modi announced to the nation that Rs 500 and Rs 1,000 currency notes — 86 per cent of all currency notes in circulation in value — would cease to be legal tender. The stated objectives were unearthing black money, cracking down on counterfeit currency, and choking terror financing.

Unsurprisingly, there were strong reactions both in favour of and against the unprecedented move, which would come to be known as ‘demonetisation’ or ‘note ban’. While some hailed it as a courageous step against impropriety that was hurting the economy, others saw the move itself as disastrous for the economy.

In the months that followed, even as reports suggested that the government had not come any close to achieving its stated objectives, the government was seen patting itself on the back for the country’s move towards becoming a ‘cashless’ economy, or, as the PM said, a ‘less-cash’ economy. Many called this an act of ‘moving goal posts’ and rushed to label demonetisation as an economic nightmare.

Three years later, we have enough data to analyse and gauge the impact of the note-ban exercise on various important sectors of the economy.

Jobs

According to Labour Bureau's Sixth Annual Employment-Unemployment Survey, the unemployment rate rose to a four-year high in 2016-17, when the government demonetised old currency notes. In 2017-18, the country's unemployment rate stood at a 45-year-high of 6.1 per cent, according to the National Sample Survey Office's (NSSO's) periodic labour force survey (PLFS).

Moreover, demonetisation caused a 2-3-percentage-point reduction in jobs and national economic activity in November and December 2016, according to a research.

Between 2016 and 2018, five million people lost their jobs and the labour force participation started declining suddenly between September and December 2016 for both urban and rural men. The rate of decline slowed down by the second half of 2017, but the general trend had continued and there had been no recovery.

Business Standard

Govt's silence dangerous: Priyanka on reports of threat to 1 mn auto jobs

Priyanka Gandhi tagged the media report on Twitter which said auto parts industry is fearing that 1 million jobs could be at stake due to the slowdown.

Congress general secretary Priyanka Gandhi Vadra on Friday cited a media report to claim that jobs of one million people in the automobile sector were in danger and asserted that the BJP government's silence on job losses was "most dangerous".

Her remarks came after industry body ACMA on Wednesday said around 1 million jobs could be on the line if the prolonged slowdown in the automobile industry continues.

Priyanka Gandhi tagged the media report on Twitter which said auto parts industry is fearing that 1 million jobs could be at stake due to the slowdown.

ALSO READ: Auto parts industry fears 1 million jobs could be at stake due to slowdown

"Jobs of 10 lakh people working in the auto sector are in danger. People working in this sector will have to search for new job avenues," she said.

"The silence of the BJP government on job losses, weakening trade and policies damaging the economy is most dangerous," Priyanka Gandhi claimed.

The Automotive Component Manufacturers Association of India (ACMA), which represents the auto component industry that alone employs around 5 million people, has sought a uniform GST of 18 per cent for the entire automobile sector in order to revive the vertical which has now witnessed 10 months of continuous decline in sales.

ACMA president Ram Venkataraman had said considering the fact that the auto component industry grows on the back of the vehicle industry, a current 15-20 per cent cut in vehicle production has led to a crisis-like situation.

"If the trend continues, the layoffs are inevitable and an an estimated 1 million people could be laid off," he said.

Business Standard

American experience suggests that an educated workforce may be overrated

This isn't to belittle the value of higher education; a tight labour market won't reduce the need for degrees for engineers or lawyers.

Business Standard : A tight labor market shows the true value of education – and we’re seeing now that college has been overpriced. For many workers, it’s not worth the time or the money.

In the depths of recession employers added years of experience and additional degrees into hiring requirements – "the barista with a master's degree" – not necessarily because that experience or education was important to do the job, but just because employers had the luxury of being more picky. As the labor market has improved, those requirements have been loosened, presumably without much impact to productivity.

This reality is at odds with the conventional wisdom for the rise in American economic inequality over the past few decades, which says that technology, globalization and education have segmented society into winners and losers depending upon whether someone is a manufacturing worker in the Midwest or a knowledge worker in a coastal city. That conventional wisdom argues that rising inequality has been for structural rather than cyclical reasons.

But as the past few years have shown, we're in an environment where employers are relaxing education requirements and those with the lowest wages (and presumably the least education) are getting the biggest raises. So maybe something has changed and now the link between education and inequality isn't as robust as it used to be, or maybe the theory wasn't right to begin with.

When unemployment was higher, it was plausible to think that more workers needed more education to earn more and to make the economy more productive. But years of very low unemployment have shown a different path, as millions of workers get that higher pay without having to spend years and tens of thousands of dollars on degrees that employers only "require" when they have leverage over workers.

This would be significant because education is one of the big four budget items – along with housing, health care and transportation – that are burdens for workers to pay for, and that policymakers have had difficulty addressing. To the extent the US could spend less on education, we could free up resources to tackle something else.

This isn't to belittle the value of higher education; a tight labor market won't reduce the need for degrees for engineers or lawyers. But as in other areas related to labor markets, maybe we've miscalculated how much is appropriate. Just as the Federal Reserve overestimated the level of the unemployment rate at which inflation becomes a concern, and deficit hawks have underestimated the level of the federal budget that's manageable without leading to higher inflation and interest rates, America may have overestimated how educated its workforce needs to be in order to thrive in a modern economy.

Job woes to remain if manufacturing doesn't pick up: Kotak Securities

The merger of SBI with associates had resulted in restructuring of the workforce.

Business Standard : Growth momentum in India may turn out to be a “jobless growth scenario” in the next 3 years, if the manufacturing sector fails to pick up, said brokerage house Kotak Securities.

According to Kamlesh Rao, MD and CEO of the firm, job op­portunities in the services se­c­tor — a key contributor of em­p­loyment — are expected to re­d­uce in the current economic scenario. “The services sector, which fuels job growth, will definitely go down. And so, the manufacturing sector is needed which can create job opportunities”, he said. He was res­p­o­nding to questions asked over merger of public sector banks, and other such proposals.

The merger of SBI with associates had resulted in restructuring of the workforce, but such fears have been allayed among other public sector firms in banking and insurance sector. In a reply to Lok Sabha last December, Pon Radhakrish­nan, Minister of State for Finance, had said the services sector had contributed 53.9 per cent to the country’s gross value added at current prices, during FY18.

The manufacturing sector, on the other hand, accounted for 16.7 per cent of the GVA.

ALSO READ: Modi govt needs to review manufacturing, private sector investment

The brokerage firm said the government needs to attract foreign direct investment in manufacturing to make India a global hub, and that the move may entail improvement in ease of doing business along with land and labour laws in the country.

“The trade war between the US and China presents India with a huge opportunity to develop its manufacturing vertical. The global situation might bring the markets down, but it’s an opportunity at the same time,” he said.

Rao feels the government needs to act on reforms in the next two fiscal quarters to keep growth momentum in the country, as well as the bourses, going.

He opined that the IBC resolution process needs to be fastened and steps needs to be taken to solve the liquidity situation of non-banking financial companies. Increase in financialisation and conversion of savings into investments have also been suggested by Kotak Securities.

Conspicuous absence of women in India's labour force in last 30 years

There are a number of ways to boost the number of women working.

India’s rapid economic growth has been accompanied by falling fertility rates and higher educational attainment among women. These advances often lead to an increase in women entering the labour force, but there has been a surprising decline on this front in India. Less than 30% of working-age women are currently in work compared to nearly 80% of men in India.

The conspicuous absence of women in India’s labour force is part of a wider issue the country is facing when it comes to jobs growth. But the fact that it is affecting women more than men is a worrying trend for India, which tends to rank poorly in UN rankings like the Gender Development Index and Gender Inequality Index, and has historically had low shares of women participating in the labour market. Plus, the number of women working has been gradually falling over the last 30 years.

There are a number of reasons for this, ranging from a lack of jobs growth in female-friendly sectors such as manufacturing, to more women staying in education for longer, and persisting stigma surrounding the idea of women working. As India grapples with boosting the number of jobs available to people – and young people especially – it must ensure it does not leave women behind in the process.

Global trends

It is useful to understand India’s experience against the global landscape. According to the latest estimates from the UN’s International Labour Organisation, the worldwide labour force participation rate in 2018 for women aged 15-64 was 53% while it was 80.6% for similarly aged men. Since 1990, participation rates for both groups have shown an overall decline around the world.

There are, however, variations in these global trends. The number of women working in high income countries went up between 1990 and 2018, largely due to policies like better parental leave, subsidised childcare, and flexibility in jobs. But in South Asia’s low and middle income countries, the number of women working has declined.

In India, female labour force participation fell from 35% in 1990 to 27% in 2018. India fares better than its neighbour Pakistan (where the rate increased from 14% to 25% over the same period). But it lags behind Bangladesh, Sri Lanka and Nepal, and other countries at similar stages of growth and development.

There are regional and demographic differences across the country. Rural women have higher participation rates than their urban counterparts. Married women, less educated women, and women from higher castes are less likely to participate in the labour market.

Business Standard

Rural unemployment: When jobs disappear, women are the first to lose out

The 'feminisation of agriculture' is 'not to be celebrated', because farm jobs keep women confined to 'low paid, insecure and oppressive labour relations'.

When Kamal Gangrude looks across at the fields beside her home on the valley floor, she sees swathes of farmland which this year will not be weeded, ploughed or planted. Sold to developers who will build factories and roads or generally put it to non-agricultural use, the loss of this farmland has also meant a loss of vital labouring jobs for the Dalit families of Pimplad, a village in Nashik district of Maharashtra.

Keep Reading : Business Standard

Previously when the monsoon rains arrived, villagers like Gangrude were assured of at least two months of work, earning between Rs 200-250 per day in the nearby rice fields. Now the work available has decreased and is more irregular. “The population is growing but the number of jobs is reducing each year,” Gangrude told IndiaSpend one hot March morning. “Last year some people got just three weeks of work in the whole season. With more machinery around too, the work is done faster.”

Gangrude’s husband is one of the lucky ones. A few years ago, he found a non-farming job as a tailor in the neighbouring town and earned Rs 6,000 last Diwali. But others, especially the village’s women, are often left jobless outside of the monsoon--the two-month period when the only farming work of the year is available. “After the plastic ban, an NGO came to the next village and taught the women how to sew cloth bags, petticoats and such things,” Gangudre said. “I would have liked to learn too but they didn't come here; I don’t know how else you can find this kind of work.”

Kamal Gangrude, 35, with her son in Pimplad village of Maharashtra's northwestern Nashik district. In the backdrop are the fields that used to provide a steady supply of farm jobs, but have now been sold to developers, thus restricting employment options for the village’s poor.

Like the villagers of Pimplad, an increasing number of women in Indian villages are being left with little employment options, except low-paid and erratic farm work. The number of female agricultural labourers in India increased by 24% between 2001 and 2011, even as 7.7 million farmers left farming, indicating how any limited, non-farming opportunities are increasingly being taken up by men, who are perceived as higher-skilled, better educated and more able to migrate for work.

This ‘feminisation of agriculture’ is “not to be celebrated”, said Ishita Mehrotra, assistant professor at Ambedkar University, Delhi, because farm jobs keep women confined to “low paid, insecure and oppressive labour relations”. Agricultural work is indicative of “a patriarchal ideology and a socio-cultural value system” that keeps women bound to the village and consumed with domestic work, while gender roles allow men to migrate for economic and social reasons, she said.