As the mountain of post-pandemic economic challenges becomes clearer along with the expanding size of India’s coronavirus count, one of the worst-hit would be the jobs sector with close to 13.6 crore jobs at risk.
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 script 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.
According to a report by Mint, overall, around 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 nano businesses, registered small companies, and even the self-employed.
While the daily-wage earners are bearing the brunt in the first phase of retrenchments, companies across industries could pink-slip employees on short-term contracts next. Over 5 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 around 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.
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.
Santosh Mehrotra, a human development economist and professor at the Centre for Informal Sector and Labour Studies in Jawaharlal Nehru University, in a report by Mint pegs India’s labour force at 495 million. In 2017-18, about 30 million were unemployed, which implies that 465 million are currently employed.
In a paper Mehrotra co-authored with Jajati K Parida of the department of economic studies, Central University Punjab (India’s Employment Crisis: Rising Education Levels And Falling Non-agricultural Job Growth), the share of the informal sector was pegged at 90.7% overall and 83.5% in the non-farm sectors.
Most estimates in the paper are based on NSS and PLFS data. Since there are 260 million people employed in India’s non-farm sector (agriculture employs another 205 million), the number of informal workers totals about 217 million across services, manufacturing and non-manufacturing sectors.
One shade of precarious employment among the informal cohort are those that have no written jobs contract. Numbers pieced together from the Mehrotra paper suggests that around 28 million have no written jobs contracts in manufacturing; 49 million in non-manufacturing; and 59 million in services in 2017-18. Overall, around 136 million workers in India, or over half the total workers employed in non-agricultural sectors, have no contracts and remain the most vulnerable in the aftermath of the coronavirus outbreak.
They can be fired without notice or severance. Most daily-wage earners or casual labourers fall in this bracket. Their pain is seen on Twitter and television feeds —videos of hundreds of migrant workers walking back to their villages are doing the rounds. Many of them work in construction. Employment in real estate construction, for example, is impacted because housing launches and sales are headed south given that lower economic growth is now a certainty.
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.
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.