The Swaddle: Excerpts from an Interview with Karl Bookman, TheSwaddle, on impact of COVID, June 11, 2020 https://www.instagram.com/tv/CBZ7DPMAw8D/
- India was already facing a bad unemployment crisis before the lockdown. How will the pandemic exacerbate the nature of unemployment in India/impact the problems we already have? What demographics will be especially vulnerable?
India had what we Economists call the ‘Dream Run’ with high growth of GDP or national income during the period 2003 to 2008. But it started to slow down after that. India has had very low ‘open’ unemployment rates, that is, because the poor need to find some work to survive. So people take on any form of work at low wage rates or take up some self-employed activity like buying cheap and selling on the street or door to door and so on. The educated population has higher unemployment rates because their ‘reservation wage’ is higher. That is, they can afford to wait till they find work suitable to their education and skill.
With the pandemic, we had a sudden closure of all economic activity. It is said that India has had the most stringent lockdown conditions. According to the Centre for Monitoring Indian Economy (CMIE), an estimated 122 million jobs were lost in April 2020 alone and three-quarters of these were small traders and wage labourers, mainly in the informal sector. CMIE also reported that in April 2020 unemployment rate remained at a high rate of 23.5 percent.
The decline in employment is not gender and caste neutral. A study using the CMIE data found that while men, who had higher work participation rates overall had, greater drop in employment overall, women who were employed in the pre-lockdown phase were more likely to lose jobs post lockdown. The disadvantaged caste groups were relatively more adversely affected. This is understandable as the women and lower caste groups tend to have the more precarious jobs and therefore more likely to be fired. In a survey by students at Ahmedabad University, we found that women were more likely to get a cut in wages, or not get paid at all, during the period of lockdown. Hence going forward, there will be a gender, caste and perhaps age related differential impact of the pandemic on employment.
2. Will the post-COVID world enable us to reshape the caring economy by recognizing care work as labour?
The COVID crisis which forced men and women workers, and children to stay home, has brought some focus on care work. At the level of the households, with children at home and no help at hand the effort that goes to keeping children engaged and healthy has hit home. Men who may not have been involved at all in care work may better understand the problem. But overall, I do not think that this short period of staying home is going to impact the patriarchal structure of our society. Care for the young and aged has been considered the work of women before the pandemic and is not likely to change dramatically post-COVID.
3. What do you envision will be the most long-lasting economic impact of this lockdown?
The Indian economy has been hit by the stringent lockdown down norms and it is going to the sometime for the economy to become fully functional again. There will be a long lasting economic impact of the destruction of production chains. There could be a restructuring of productive resources and labour. Some industries which were on the verge of closure will definitely close down, others that were planning to shut will do so. The lower tiers of the sub-contracting chains, mainly the informal enterprises will in all probability be cut off. The long-lasting economic impact of this lockdown will be massive increase in inequality of income and wealth, which was already rising sharply.
The only way to a more equal society is to recognize the informal sector and work to integrate it more fully with the formal sector. On a positive note, this can be done through enabling contracts, sub-contracting, concessions on GST modalities and much more that can be worked out if the government and private sector show the will to do so.