At a time when most economists expect the economy to recover in the second half of the current fiscal year, private think-tank the Centre for Monitoring Indian Economy (CMIE) does not support such optimism, citing a reverse trend in employment statistics. The agency believes that higher job losses among young workers, which account for a major share of total employment, don't bode very well for a stronger recovery in the second half of 2020-21 or in the future.
As per the latest CMIE report, there were job losses in younger age groups, those below 40 years of age, till December 2020 this year, while all age groups above 40 years have seen a small gain in employment.
"India's workforce aged in 2020-21 during the lockdown. The share of those over 40 years of age, which was 56 per cent in 2019-20 increased to 60 per cent by December 2020. The share of the relatively young has correspondingly shrunk. This ageing of the workforce again, does not bode well for a stronger recovery in the second half of 2020-21 or in the future," said Mahesh Vyas, CEO, CMIE.
As per the CMIE, nearly fifteen million less people were employed in December 2020, nine months after the lockdown hit people's livelihood compared to those that were employed before the lockdown in 2019-20.
Those who lost jobs were concentrated in urban regions, among women, among relatively younger workers, graduates and post graduates and salaried employees, it said. Based on this, it is easy to assume that by December 2020, India's workforce had not only "declined quantitatively but also deteriorated qualitatively". Given this crater India has dug itself into on the employment front, the party rejoicing a quick V-shaped recovery is dancing on thin ice, CMIE said.
In the October-December quarter, the count of the employed contracted (not making sense, can we say employment shrank by 2.8%?)by 2.8 per cent, compared to a drop of 23.9 per cent and 2.6 per cent recorded in the June and September quarters.
Employment in December 2020 was 4.2 per cent lower compared to the same period last year. By the end of December 2020, employment was 14.7 million, short of what it was in 2019-20. Job losses were concentrated among younger workers, with all groups below the age of 40 suffering a fall in employment, while all groups above 40 years of age saw a small gain in employment.
Graduates and post-graduates had a 13 per cent share in total employment in 2019-20, while their share in the loss of jobs was 65 per cent. Of the 14.7 million jobs lost, 9.5 million were those of graduates and post-graduates.
Besides, salaried employees who accounted for 21 per cent of total employment in 2019-20, accounted for 71 per cent of the total job losses.
Urban India, which constituted 32 per cent of total employment in 2019-20, accounted for 34 per cent of the total loss of employment in the financial year 2020-21 till December 2020.
Meanwhile, women, who constituted just 11 per cent of the total workforce, accounted for 52 per cent of the job losses, indicating that they continue to bear a disproportionately high proportion of the cost of economic shocks.
"They suffered a disproportionately large loss of employment during demonetisation and now, they have borne a similarly disproportionately high share in job losses because of the lockdown," the CMIE report noted.