India
lost 122 million or 12.2 crore jobs in April 2020 as a very harsh lockdown was
imposed across the country. Out
of this, 21 million jobs came back in May. In June, over 70 million jobs came
back as lockdown was gradually lifted. Still,
around 31 million jobs are yet to be back. And the jobs which have come back
are mostly lower quality ones.
Most
of the jobs that came back (44 million out of 70 in June) are those of small
traders and daily wage earners. They account for around one third of all jobs
in India – as lockdown was eased/lifted, these essentially self-employed people
slowly got back to their trade. However, they
accounted for 75% of job losses in April but only 64% of jobs restored in May
and June.
Jobs
rose most in agriculture. In May, farm sector added 1.4 million jobs and in
June a massive 11.8 million – partly it is because of record kharif sowing in
June, but most probably this is also reflective of huge spike in disguised
unemployment.
Work
under MNREGA has surged both in May and June – both farming and MNREGA work
have accommodated small traders and other wage labourers, who lost their jobs
elsewhere.
Out
of 18.2 million job losses in April among business persons, 15.8 million jobs
have come back.
Recovery
of jobs has been slowest among the salaried section. 17.7 million lost their
jobs under this category in April, in May it increased marginally to 17.8
million. In June, there was a recovery of just 3.9 million salaried jobs. It is
a matter of deep concern as the salaried segment accounts for 21.3% of all jobs
in India.
Though
there is no comprehensive data but most of the salaried employees have been
forced to take salary cuts. This includes first salary cuts in the Tata group
in 152 years and DA freeze for central government employees perhaps for the
first time.
For
more details on weekly jobless numbers, state-wise break up etc, see, https://unemploymentinindia.cmie.com/
How
does the global picture look?
USA – In April, the USA lost a record 20.5
million jobs and the unemployment rate hit a high of 14.7% (in February 2020,
it was at a historic low of 3.5%). At that point, economists had been
anticipating unemployment rate to hit 20% but in May, the US economy surprised
by adding 2.5 million jobs (unemployment rate at 13.3%). In June, the US economy
again added a record 4.8 million jobs (unemployment rate at 11.1%). This is the
largest single-month gain in the US non-farm payroll.
China - It is difficult to estimate how many jobs
China has lost as Chinese data is opaque at best. A recent CNN story
(https://edition.cnn.com/2020/05/08/economy/china-unemployment-intl-hnk/index.html), quoting several experts, estimated that
around 80 million (8 crore) people may have lost jobs in China by May. However,
it is important to remember that going by export and industrial production
data, China is also witnessing the fastest recovery among the major economies.
But
most amazing is perhaps Europe – despite massive number of Covid-related
casualties and long lockdowns leading to a steep contraction in the EU economy,
there has been insignificant job loss (unemployment rate in the UK is around 4%
in May and around 5.8% in Germany). This is primarily because all the major
European countries (and this time the UK too) deployed their state-funded
payroll-protection schemes (like Germany’s famous Kurzarbeit, whereby the government pays 2/3 of an individual’s
salary), helping distressed companies to survive without cutting jobs.
