Employment fell by 2.5 million in February, 0.1 million in March, 7.4 million in April and then by 15.3 million in May, explains Mahesh Vyas.<\/strong><\/p>\n

The unemployment rate that reached 11.9 per cent in May 2021, continued to rise into early June.<\/p>\n

The 30-day moving average unemployment rate as of June 6, 2021 was 13 per cent.<\/p>\n

The labour participation rate that had fallen to 40 per cent has fallen further to 39.7 per cent.<\/p>\n

And the most important labour market indicator, the employment rate which had fallen to 35.3 per cent in May, dropped to 34.6 per cent by June 6, 2021.<\/p>\n

The Indian labour market is in its worst condition since the nation-wide lockdown months of April and May 2020.<\/p>\n

The last four weeks have seen a particularly sharp deterioration in labour market conditions. The downturn began in the week ended May 16.<\/p>\n

During this week, the labour participation rate was at 40.5 per cent which was higher by a whisker than the average 40.4 per cent rate around which this ratio has been hovering for several months since the 2020 lockdown.<\/p>\n

But the unemployment rate shot up suddenly to 14.5 per cent after remaining stable for several weeks at around 8 per cent.<\/p>\n

This implies that during this week of May 16, a number of people lost employment suddenly and they continued to look for jobs, albeit unsuccessfully.<\/p>\n

In the next week that ended on May 23, the situation got worse with the unemployment rate shooting up to 14.7 per cent.<\/p>\n

This happened even as the labour participation rate declined to 39.4 per cent.<\/p>\n

The exceptionally high unemployment rate of the previous week apparently seriously discouraged labour from looking for work.<\/p>\n

They retreated and brought the labour participation rate down.<\/p>\n

The result of low labour participation and high unemployment was the lowest employment rate in nearly a year.<\/p>\n

It fell to 33.6 per cent. This was the lowest since the week of June 7, 2020.<\/p>\n

There was a recovery of sorts in the week of May 30.<\/p>\n

The unemployment rate fell sharply to 12.2 per cent from its recent peak of 14.7 per cent in the previous week.<\/p>\n

But, labour continued to reel under the effect of the previous week’s high unemployment rate.<\/p>\n

Their disappointment with the high unemployment rate is seen in the continued fall in the labour participation rate.<\/p>\n

This fell to just below 39 per cent from 39.4 per cent in the previous week.<\/p>\n

The feeling of being discouraged is understandable because the unemployment rate inched up again in the week ended June 6 when it ended at 13.6 per cent.<\/p>\n

Labour participation rates have been decidedly under 40 per cent.<\/p>\n

The average over the three weeks ended June 6 was 39.2 per cent.<\/p>\n

This consistent fall in the labour participation rate is a matter of concern.<\/p>\n

Low and falling labour participation rate and high unemployment rate imply a fall in the employment rate and a fall in absolute employment.<\/p>\n

The employment rate fell from 36.8 per cent in April 2021 to 35.3 per cent in May 2021.<\/p>\n

This translated into a loss of 15.3 million jobs.<\/p>\n

As mentioned earlier, this fell to 34.6 per cent measured by the 30-day moving average on June 6.<\/p>\n

During the week ended June 6, it was much worse at 33.9 per cent. This implies a further loss of jobs.<\/p>\n

Employment has been falling since January 2021 when it had touched a recent peak of 400.7 million.<\/p>\n

It has fallen in each of the four months since then.<\/p>\n

It fell by 2.5 million in February, 0.1 million in March, 7.4 million in April and then by 15.3 million in May.<\/p>\n

The cumulative loss since January therefore is a substantial 25.3 million.<\/p>\n

This is a significant 6.3 per cent fall in the employed workforce over a four month period.<\/p>\n

More recent data on the employment rate suggests that the fall in employment may not have stopped till the first week of June.<\/p>\n

This relentless loss of employment can be expected to abate somewhat in the coming weeks as many parts of the country that were under a lockdown have started announcing cautious relaxations.<\/p>\n

These could provide some succour to the daily wage labourers who have suffered during the calibrated and localised lockdowns of May 2021.<\/p>\n

Nearly 17 million daily wage labourers and small traders such as hawkers lost employment in May 2021.<\/p>\n

Most of these losses were the direct outcome of the increasing lockdowns across the country during the month.<\/p>\n

As these restrictions on movement are relaxed, these workers can be expected to return back to their haunts in search of employment.<\/p>\n

We can expect a quick recovery of the informal jobs that were lost in the unorganised sectors because of the local lockdowns.<\/p>\n

But, there is also a steady fall in the employment independent of the lockdowns.<\/p>\n

The total non-farm jobs lost since January 2021 works out to 36.8 million.<\/p>\n

Of this, daily wage labourers account for 23.1 million. Salaried employees account for 8.5 million and the rest are entrepreneurs.<\/p>\n

It would take a strong recovery of the India economy to recover the remaining jobs or revert to the employment levels of 2019-20.<\/p>\n

The unlocking process can be expected to repair about two-thirds of the job losses associated with the lockdown of May 2021.<\/p>\n

That would be 17 million out of the 25 million non-farm jobs lost during the month.<\/p>\n

<\/p>\n

<\/p>\n

<\/p>\n

<\/p>\n

Mahesh Vyas is MD and CEO, CMIE P Ltd.<\/strong><\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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