A bigger pandemic

Context: Current model of economic growth, which prioritizes capital over labour, may fail to solve the real crisis of unemployment and jobless growth.

Reasons for the worsened employment situation

• Severe distress in the economy even before the pandemic:majorly due to the economic shocks of demonetization and the hasty roll-out of Goods and Services Tax.
  • Between 2016-17 and 2019-20, growth decelerated to 4%, less than half the 8.3% in 2016-17.
  • The unemployment rates in urban increased by almost three times between 2011-12 and 2017-18. 
  • Youth unemployment rate in India was amongst the highest in the world:the unemployment rate among the 15-24-year-olds in 2017-18 was 28.5 %.
  • Salaried workers suffered a decline in real wages at 1.7 % per annum between 2011-18. 
  • The number of workers declined by 15 million between 2011-12 and 2017-18.
• Impacts of lockdown:
  • On casual workers: 50 % become unemployed, and 10 % exited the labour force. While only 1 of 3 casual workers in urban areas could hold on to their job with another 5 % became self-employed
  • On regular salaried workers: 10 % become unemployed, and 5 % exited the labour force. 
  • High urban unemployment rate: According to the Periodic Labour Force Surveys (PLFS) April-June 2020 round, the urban unemployment rate for the population above the age of 15 was 20.8 %.
    • According to the Centre for Monitoring Indian Economy (CMIE) monthly average unemployment rate for April-June was 19.9 %.
    • Unemployment is more prevalent among person in 15-29 age groups: Every third person in the 15-29 age groups was unemployed during April-June 2020.
  • Low quality of employment:
    • Increase in precarious jobs and a decline in access to social security.
    • Decline in real wages of casual workers in rural areas.

Conclusion: The level of unemployment over the last two decades is not just a symptom of the “jobless” model of economic growthbut is also a recipe for political and social instability.