Does the COVID-19 and Unemployment Go Hand in Hand?
The virus has changed everything
In past few years increasing unemployment rate has grabbed everyone’s attention. And it posed as a biggest threat to development of the nation. We know that eradication of unemployment is not easy but is not impossible either. In last two and half years, COVID-19 has changed everything drastically across the globe. And world specially India has seen the COVID-19 and unemployment going hand in hand. Not only has it led to loss of lives at a disturbing rate but also has immensely disturbed the health of people and the work culture all over the world. Everything became stagnant and things went severely downhill. Companies shut down and millions of people lost their jobs and fell into the cycle of crippling debts. Poverty increased massively. Anxiety and depression spread, foreign trade took a halt and what not. Is the world better off now? No, and the recovery is slow but it is happening.
Employment generation in India
India is being claimed as one of the fastest growing economies in the world but the employment generation is still far behind the milestone. India’s labor force participation is low as it is and has fallen again. Majority of the population in the working age group whose potential is very high sit at home with no jobs which lead to under utilized potential of the people and slow growth of the country.
The large scale unemployment issue in India has not taken place after the global pandemic but was always a major concern which to this date remains unsolved. In fact, we can say that the COVID-19 further added to the problems. According to economic times in 2019 the youth unemployment rate was 23.01% and was revolving around the 22% mark. In June 2021 the youth unemployment rates spiked up to a solid 26%. This shows that employment generation has not been very efficient in India and the COVID-19 only made things worse. The unemployment rates increased up to a disturbing 23.52% in April 2020 and then reduced till 2021 which increased again since the spread of the new variant.
How did the pandemic affect the employment rates severely?
The rate of unemployment increased from February 2020 when most of the people and households experienced a major reduction in salaries and income. Later, the prices of essential goods and services also went up. People who worked as maids, barbers, cobblers, security etc. lost jobs due to social distancing. The lower middle classes were the hardest hit by the upsurge in unemployment. Working hours reduced so much during COVID-19 that it was equivalent to loosing over 260 million jobs. The virus caused a devastating effect on the employment conditions in India since most of the companies fired a large number of their employees without any long term notice. Additionally, unorganized sector has faced the hard unemployment. 4 out of 5 construction workers lost their jobs as all construction works were on halt.
This loss of jobs directly led to reduction in purchasing power. The demand for goods and services fell and further impacted the market. Although the government announced that no worker would be fired of their job and they would be given compensation salaries during the lockdown but none of this happened. Mass termination of workers kept happening which led to rapid unemployment. The nation has witnessed reverse migration. Not to mention that the self-employed people like vendors, shopkeepers, maids, hawkers, rickshaw pullers etc. also suffered heavily due to this surge.
What is the solution after all?
The issue of Unemployment cannot be solved overnight and takes a lot of planning and implementation as well, but that does not mean it cannot happen. India is a huge country with a vast population. And to address the issue of unemployment it needs practical ideas rather than unrealistic ones. It needs ideas and plans that can be implemented in the long run like starting regional programs to reduce unemployment, strengthening of MGNREGA, giving incentives to labor intensive services etc. Eradication of unemployment is not easy but is not impossible either.
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