The easing of lockdown measures witnessed in more recent months has spurred a revival in employment but, in truth, the national unemployment figures released by the CMIE for September mask an unusual and concerning underlying trend that threatens to persist even in the post-pandemic era.
CMIE’s data showed a rather optimistic rise in employment during the first week of September. However, at the same time, there was a noticeable slump in workforce participation. Typically, a rise in employment is directly correlated with an increase in workforce participation as workers are encouraged by the market’s improved absorption of employees.
Unfortunately, an opposite trend has been observed. Despite an overall employment increase by 5.1 million in September, unemployment showed a decline by up to 7.3 million. This difference of 2.2 million between the two figures indicates that while many have found new jobs to support themselves; others have stopped looking for jobs entirely, thus causing a decline in the size of the workforce.
This trend may seem confusing at first, but taking a closer look at the rural-urban disaggregation provides some insight as to why this is occurring. Analysts have noted that while unemployment may be making a recovery, the quality of the recovery itself is worrying.
Upon closer inspection, we can see that higher income jobs with better security are slowly being replaced by low-paying, rural jobs. This is an unfortunate consequence of the huge reverse migration that has taken place within the country over the last few months.
With millions of Indians now being forced into vulnerable employment characterised by low-pay, harsh working conditions, low productivity, limited worker rights and low job security, the need for an urban employment scheme similar to the MGNREGA has never been more clear. MGNREGA, which is likely to be the world’s largest rural jobs programme, has aided 86 million rural-dwelling Indians during the first half of the 2020 financial year.
While talks of the scheme being implemented in towns and cities as well has been in the air, the lack of initiative at the central government level has led several states to push forward with their own initiatives. Odisha, Jharkhand and Himachal Pradesh are ahead of the pack concerning these initiatives.
Discussions over an urban jobs programme had happened long before the onset of the Covid-19 outbreak in India and can be traced back to August 2019. Yet, over a year later, policy-planning around such a scheme, reportedly, remains vague.
Given the real concern that the streamlined operations that companies have been forced into as a consequence of the pandemic may turn out to become a permanent reality, an urban public works scheme would provide greater security to India’s casual workers, while propping up wages as well.