The pandemic has caused great distress among India’s youthful urban workers.  |  Photo Credit: PTI
- Data from the Centre for Monitoring Indian Economy (CMIE) revealed that the overall unemployment fell from 10.99 per cent in June, to 7.43 per cent in July
- Urban unemployment remained stubbornly high in July at 9.15 per cent, despite showing some improvement from the June figure of 12.02 per cent
- According to CMIE data, a staggering 41 per cent of people aged between 15 and 29 were unemployed in May, with 27 million people aged between 20 and 30 losing their jobs in April
India’s monthly unemployment rate for July fell to pre-COVID-19 levels for the first time since March, indicating that the severe jobs crisis that loomed over the nation over the last three months was now subsiding.
Data from the Centre for Monitoring Indian Economy (CMIE) revealed that the overall unemployment fell from 10.99 per cent in June, to 7.43 per cent in July. In March, that tail end of which saw Prime Minister Narendra Modi announce a nationwide lockdown, the overall unemployment rate was pegged at 8.75 per cent. According to CMIE data, the overall unemployment rate between August 2019 and February 2020 stood between 8.19 per cent and 7.16 per cent.
Odisha and Gujarat’s unemployment rates for July were the lowest in the nation pegged at just 1.9 per cent, followed by Meghalaya at 2.1 per cent. There is still cause for great concern in Haryana though, as it recorded an alarmingly high unemployment rate of 24.5 per cent. The joblessness pain is also acute in Delhi and Himachal Pradesh that recorded rates of 20.3 per cent and 18.7 per cent, respectively.
Urban workers, youth in distress
The fall in India’s overall unemployment has, largely, been driven by improvements in rural employment. India’s rural joblessness rate stood at 6.6 per cent in July compared to 10.52 per cent in June. Urban unemployment though, remained stubbornly high in July at 9.15 per cent, despite showing some improvement from the June figure of 12.02 per cent.
However, in the view of some analysts, the urban joblessness rate may mask the real ground realities. The tapered resumption of business activity and lifting of mobility restrictions has, indeed, allowed firms to limp back to life, but the majority of enterprises are still operating at sub-optimal capacities. Companies trying to protect their labour may now find a large part of their workforce significantly under-employed leading to low levels of productivity.
A survey conducted by Manpower Group showed that the large majority of Indian employers do not anticipate increasing their payroll, or hiring in the coming months. For India’s youth population who, typically, already find themselves in low-paying, entry level jobs, the upcoming quarter could prove to be an extremely distressing time.
Even prior to the pandemic, the country was already suffering from concerningly high rates of unemployment between the 20 to 30 age bracket. According to CMIE data, a staggering 41 per cent of people aged between 15 and 29 were unemployed in May, with 27 million people aged between 20 and 30 losing their jobs in April.
Given the wage inertia that has plagued India Inc, only made worse by the pandemic, analysts expect the stress of COVID-19 to last possibly for decades, as India’s large youth cohort find themselves unable to save. With millions of fresh graduates entering the workforce year-on-year, exacerbating the labour surplus, the ‘demographic dividend’ that comes with having a large youth population is, according to CMIE director Mahesh Vyas, at risk of turning into a ‘demographic demon.’