Re-employment still a challenge for those who lost jobs in COVID-19 first wave

As many as 40% of people who had lost their jobs over April or May 2020 after the COVID-19 pandemic hit India, had been unable to find a paying job even ten months after the national lockdown began, with the problem most acute for younger workers in urban India, as per a new survey-based report.

On an average, people who lost their jobs remained unemployed for six months and this worrying trend of prolonged unemployment was playing out even before the second wave of the pandemic, according to the report informed by a survey of nearly 4,800 individuals across 150 urban ward clusters in Uttar Pradesh, Bihar and Jharkhand.

“Unemployment spells are, on average, almost half a year for unemployed individuals. Employed individuals are working on average six hours less than their usual weekly hours, and the share of them with work for the full year has halved since the previous year,” concluded Swati Dhingra and Fjolla Kondirolli in their report titled ‘City of Dreams no more, a year on: worklessness and active labour market policies in urban India’.

Over 3,200 of those respondents had also been contacted amid the first wave of the pandemic for a survey published last September, which had revealed that 52% of urban workers went at least a month without work, pay or any financial assistance in India’s first lockdown which began in March 2020.

Stopped looking for work

Around 2% of those contacted during the latest survey conducted through field visits and telephone calls between January and March this year, had dropped out of the labour force altogether and were no longer looking for work.

“A year after the pandemic hit India, urban individuals are facing worklessness, work without pay and long spells of unemployment. 40% had no work or pay ten months on, and average unemployment spells among the unemployed were six months before the second wave of the pandemic hit,” the report from researchers at the London School of Economics and Political Science said.

The quality of employment for those affected the worst was not optimal even before the pandemic, with just 14% being paid at the minimum wage level in their previous jobs.

Official social safety nets continue to be out of the reach of most working individuals, the report said, with only 12 of 4,763 survey respondents having an account with the Employees’ State Insurance Corporation or the Employees’ Provident Fund Organisation (EPFO).

Younger individuals hit hard

“The new survey shows that those in the lower half of the pre-Covid earnings distribution (below median) are faring worse in terms of job losses, zero hours and zero earnings. Younger individuals, between 18 to 25 years of age, are suffering more too. They are less likely to be in work and more likely to have not worked any hours in the week before the survey (compared to 26-40 year olds),” the report noted.

Younger individuals in the lower half of pre-Covid earnings, have even worse outcomes, with 47% of them not having any work the previous weeks or no pay over the last two months or longer, the report pointed out.

“Young workers, who are over-represented in informal employment, are particularly at risk of long-term worklessness. This can have life-long scarring impacts on their employment and earning prospects as well as their mental health, and is detrimental to the overall wellbeing of their communities,” said Ms Dhingra.

Ms Kondirolli said that the majority of individuals surveyed would prefer a job guarantee over cash transfers to cope with the crisis, because it would directly address the lack of work and livelihood insecurity.