Covid- 19 put millions of jobs at risk
The worst-case scenario of job losses in millions is likely for employees who don’t have a written formal appointment letter from his employer in all sectors be it formal or informal and get regular salary.
In the travel, tourism and hospitality industry this category includes people who either work on short-term contracts or even without them. This includes guides, of course, but also employees of parking contractors, cleaners working in shops, waiters in restaurants, suppliers of vegetables, meat and flowers to the hotels among others. Flower trade is also an allied industry to both tourism and the events business. The marriage season starts around 15 April. There is no way marriages could be held now. It consumes much of flowers besides hotels, events and export.
Besides marriages, artistic festivals have been a casualty as well.
For these workers, the virus outbreak has meant a loss of livelihood. Industry body CII said that more than half of the tourism and hospitality industry can go sick with a possible loss of over 20 million jobs if recovery in the industry stretches beyond October 2020.
The situation is similar in many other services industries, in manufacturing and non-manufacturing sectors such as construction. Lower growth because of falling demand and supply constraints would not only make fresh job creation tougher, but also hurt those who are currently employed. Overall, about 136 million non-agricultural jobs are at immediate risk, estimates based on National Sample Survey (NSS) and Periodic Labour Force Surveys (PLFS) data suggested. These are people who don’t have a written contract and include casual labourers, those who work in non-registered small/micro businesses, registered small companies, and even the self employed.
While the daily-wage earners are bearing the brunt in the first phase of job loss, companies across industries could pink-slip employees on short-term contracts next. Over five million Indians have job contracts less than a year in tenure.
The Adecco Group India, a staffing company, has mapped the impact of covid-19 spread across employment in some Indian industries. It said about nine million jobs can be reduced across the manufacturing clusters of textiles, capital goods, cement, food products, metals, plastics, rubber and electronics. Manpower cuts in the automotive industry started last quarter owing to falling sales.
The coronavirus situation will only exacerbate unemployment. Adecco estimated that the automobile industry can lose up to a million jobs in the dealer ecosystem, front-line roles, and the semi-skilled. Around 600,000 ground and support roles on contract in the aviation industry are at risk.
The implications of this crisis will be dire. The possible labour market crunch being seen by industry post covid may turn into a different scenario.
Who among the already employed are the most vulnerable? The answer is those that don’t have the job security.. They are often referred as “informal" workers.
One shade of precarious employment among the informal cohort is those that have no written appointment contract.
They can be fired at any time.. Most daily-wage earners or casual labourers fall in this bracket. The pictures of hundreds/thousands of migrant workers walking back to their villages indicate towards this reality. Many of them work in construction, domestic services, street vendors, footpath helpers etc.
Overall in India’s manufacturing sector, textiles and apparel employs nearly 18 million and falling demand now puts many jobs at risk.
The manufacturing sector is stressed beyond textiles. Leather footwear exporters face similar predicaments.
According to the Agra Footwear Manufacturers and Exporters Chamber ,the city has 250 mechanised factories and another 5,000 cottage industries who can churn out half a million pairs a day.
The cluster employs over 400,000 and half this work force are daily-wage earners. With the dip in demand and eventual lockdown, they have no income. Over the past two months, more than ₹450 crore worth of export orders were cancelled by European brands.
Manufacturing, which employs 56.4 million people in India, is just one part of the story. The non-manufacturing sector, which includes construction, mining, electricity, water and gas engages another 59 million. But India’s largest employer by far is services with an estimated 144.4 million workers.
The Event management industry employs 10 million between direct and indirect. There are lighting people, infrastructure companies that provide tents, flower traders— 80% of those employed could go jobless.
Meanwhile, the retail trade, which employs over 37 million—the largest employer in the services sector—will face job losses as well, particularly in the non-essential segments. With malls and stores closed, the front-end staff have little to do.
The bigger question is expected demand slip in coming months. All sectors are grappling to understand the psychological impact of the lockdown and its impact on business and jobs in near future.