Study: unemployment nearly doubled after lockdown announcement

As soon as the Coronavirus-induced lockdown was announced, rural India’s unemployment rate nearly doubled. According to Oxfam India’s report, ‘The India Discrimination Report’, released on Thursday, unemployment in rural India increased from 6.8% in January-March 2020 to 12.1% in April-June 2020, the first quarter following the national lockdown announced in March.

In urban areas, the rate of unemployment rose from 9% to 20.8%. According to the government’s Periodic Labour Force Survey (PLFS), unemployment is when people are not working or looking for work.

As per this definition, regular/salaried workers and self-employed people who didn’t work during the reference week were considered employed. They didn’t have jobs and no earnings, but since they weren’t looking for or available for work, they were considered employed, the report said.

However, if one broadens the definition to include people who weren’t working during the reference week, as well as people seeking or available for work, the increase in unemployment rate becomes alarming,” the report said. In rural areas, the unemployment rate goes from 10.5% to 22.2%. The increase in urban areas is more alarming, with a rise from 15% to 50.3%.”

The study also found that the unemployment rate has increased more for people from Scheduled Tribes (ST), Scheduled Castes (SC), and Muslim communities than those from the General category.

Based on the distribution of workers across various forms of employment, casual employment was hit the hardest during the pandemic period due to the closure of non-agricultural activities in urban areas. Consequently, self-employment went up, suggesting people did it for survival.

However, the report notes that the share of regular jobs stayed the same.

Muslim self-employment increased very little compared to SC/ST and general self-employment.It could be because of “lower acceptability to deal directly with consumers at the household level”, which pushed them away from casual jobs and into unpaid family work.

In the first quarter after the lockdown was announced, overall unemployment among Muslims went up from 9% to 17%, but for general workers, it went up from 7% to%.

Taking a broader look at unemployment, the report said Muslims in rural areas saw the biggest spike in unemployment – from 14% to 31%. For SC/ST and General category, the rate increased from 10% to 20% and from 11% to 22%, respectively.

Rural areas become more important during times of crisis because castes and religions become more visible.”People are going to deal more with their friends. Because SC/ST and Muslim people are socially and economically vulnerable, they can’t get much protection from their group. The rural labour market would, therefore, be more affected by discrimination than the urban.”

β€œThe pandemic has had a severe effect on urban areas because of a series of national and state lockdowns, which affected business directly.” Compared to rural areas, social discrimination has been less, because people’s professional identities tend to blur their castes or religions.

According to the Oxfam study, the percentage of regular/salaried workers who did not report work during the two successive quarters rose from 5.9% to 29.7%. Urban areas went up from 6.9% to 39.4%. Muslims went from 11.8% in January-March 2020 to 40.9% in April-June.

According to Oxfam’s analysis, women’s employment increased during the April-June 2020 quarter, even as men’s employment declined.

An important segment of regular women workers in urban areas is employed as domestic help and in unskilled jobs. They provided a number of daily support services at a relatively low cost, which the upper and middle classes found convenient to maintain with either a full or partial payment.”

There was a significant decline in the earnings of workers in all social groups and employment categories during the April-June 2020 quarter, according to the study.Rural areas’ monthly earnings were 9% below the average for 2019-20 in the first quarter following Covid-19.In urban areas, however, the deficit was 21% higher.

People from Muslim communities recorded the maximum decline – 13% – in rural areas, while the rest experienced a similar decline.

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