Skip to main content

Slowdown impact: Joblessness in India may cross 8%, people quitting labour market

By Our Representative
A 30-day moving average of the unemployment rate during most of the first week of March 2020 was over 8 per cent, even though the ended with an unemployment rate of 7.71 per cent, Mahesh Vyas, managing director and CEO of one of India’s top consulting firms, Centre for Monitoring Indian Economy (CMIE), has said.
In a recent analysis of the unemployment situation, the top expert says, “The unemployment rate has been rising steadily for over two years now”, and while till recently it looked like it would settle at a shade below 8 per cent, it seems that “the rate could rise to more than 8 per cent.”
Suggesting that it is possible to say there is “a limit to the increase in the unemployment rate”, however, he adds, what is particularly alarming is, “After a point, people get so discouraged by not finding jobs that they exit the labour markets”, leading to “a rather incongruous impact of a fall in the unemployment rate.”
According to Vyas, “If people who cannot find jobs stop looking for jobs, they are quitting the labour markets and in doing so, they are reducing the count of the unemployed and thereby reducing the unemployment rate.” However he says, this type of decline in the unemployment rate “is not a good sign.”
In fact, he says, “It is worse than an increasing unemployment rate. This is what has been happening in India. The labour participation rate has been falling. And, given the poor prospects of growth, this is likely to continue to happen.”
“The labour participation rate in February was 42.6 per cent”, Vyas says, adding, “In the last week of the month it had dropped to 42 per cent. The 30-day moving average labour participation rate has been falling since February 20. In the first week of March 2020 it was 42.14 per cent.”
Worrisome, during 2019, there was increase in number of persons employed in farming, which is risky business, requiring additional government support
Further, notes Vyas, “There is an additional reason why the labour participation rate may decline. This is because the quality of employment is deteriorating. The emerging composition of employment indicates a decline in good quality jobs and an increase in risky employment choices.”
Thus, “During 2019, there was a big increase, of 8 million, in the count of self-employed entrepreneurs. At the same time, salaried jobs declined by 1 million. A salaried job is arguably, the most preferred kind of employment. When these jobs decline, labour has few choices.”
What is also worrisome, Vyas says, is that during 2019, there was also an increase in the number of farmers, pointing out, “Farming is risky business which has required additional support from the central government and several state governments. Farming is not the first choice for employment of any young graduate. It can be either disguised unemployment or a compulsion.”
Then, he says, “New risks have emerged in the form of the Covid-19 virus. This threatens to shutdown economic activity in many pockets of the world. This could disrupt some supply chains in India and it has started to impact tourism and hospitality industries which are significant providers of employment.”

Comments

TRENDING

Buddhist shrines massively destroyed by Brahmanical rulers in "pre-Islamic" era: Historian DN Jha's survey

By Our Representative
Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book, "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

RSS' 25,000 Shishu Mandirs 'follow' factory school model of Christian missionaries

By Bhabani Shankar Nayak*
The executive committee of the International Union of Anthropological and Ethnological Sciences (IUAES) recently decided to drop the KISS University in Odisha as the co-host of the World Anthropology Congress-2023. The decision is driven by the argument that KISS University is a factory school.

India must recognise: 4,085 km Himalayan borders are with Tibet, not China

By Tenzin Tsundue, Sandeep Pandey*
There has as been a cancerous wound around India’s Himalayan neck ever since India's humiliating defeat during the Chinese invasion of India in 1962. The recent Galwan Valley massacre has only added salt to the wound. It has come to this because, when China invaded the neighbouring country Tibet in 1950, India was in high romance with the newly-established communist regime under Mao Zedong after a bloody revolution.

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur*
Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Time to give Covid burial, not suspend, World Bank's 'flawed' Doing Business ranking

By Maju Varghese*
On August 27, the World Bank came out with a statement suspending the Doing Business Report. The statement said that a number of irregularities have been reported regarding changes to the data in the Doing Business 2018 and Doing Business 2020 reports, published in October 2017 and 2019. The changes in the data were inconsistent with the Doing Business methodology.

Delhi riots: Cops summoning, grilling, intimidating young to give 'false' evidence

Counterview Desk
More than 440 concerned citizens have supported the statement issued by well-known bureaucrat-turned-human rights activist Harsh Mander ‘We will not be silenced’ which said that the communal riots in Delhi in February 2020 have not been caused by any conspiracy, as alleged by the Delhi Police, but by “hate speech and provocative statements made by a number of political leaders of the ruling party.”

WHO chief ignores India, cites Pak as one of 7 top examples in fight against Covid-19

By Our Representative
In a move that would cause consternation in India’s top policy makers in the Modi government, Dr Tedros Adhanom Ghebreyesus, World Health Organization (WHO) director-general, has singled out Pakistan among seven countries that have set “examples” in investing in a healthier and safer future in order to fight the Covid-19 pandemic.

Tata Mundra: NGOs worry as US court rules World Bank can't be sued for 'damages'

By Kate Fried, Mir Jalal*
On August 24 evening, a federal court ruled that the World Bank Group cannot be sued for any damage caused by its lending, despite last year’s Supreme Court ruling in the same case that these institutions can be sued for their “commercial activity” in the United States.

Top Catholic group wants quota for Dalit Christians, foreign fund licenses revived

By Our Representative
Reiterating its long-pending demand to give "scheduled rights for Dalit Christians”, the All-India Catholic Union (AICU) has regretted that while converts to Sikhism and Buddhism from the former untouchable, or Dalit communities, have been included in the scheduled caste (SC) category, Christians from the identical communities have been “kept out.”