After losing his job as an accountant in a metallurgy in Howrah, shortly after the outbreak of the Covid pandemic three years ago, and a period of confinement in his two-room flat near Posta market during the lockdown, he had first landed the part-time job at the jute sack wholesaler, then at the restaurant checkout.
“I’m juggling two jobs now…and I’m making about the same money I was making in metallurgy…but my quality of work life has gone down. Longer working hours, no safety net for health or old age,” says Maiti (last name has been changed to protect her identity).
Maiti is not the only one to complain. As the economy slowly recovers from the pandemic-induced business collapse, jobs are flooding the market, but their quality is often uneven, as most of them are in the informal sector.
At the same time, with population growth and an increase in the number of new labor market entrants jostling with those who have lost their jobs during the pandemic, job opportunities are still too few and far between.
“Growth is mainly driven by large enterprises that have recovered from two years of COVID-19, but micro, small and medium-sized enterprises (MSMEs) or the semi-formal sector are partly dead and partly not. recovered from the double damage of demonetization and the pandemic,” explained Dr. Pronab Sen, renowned economist and former chairman of the National Statistics Commission.
The MSME sector accounts for three out of four formal sector jobs in India. The bitter fact, analysts say, is that the closure or reduction of operations of many MSMEs has affected many more workers like Maiti. Economists have pointed out that unemployment, which was previously below 3% in 2011-2012 and around 6% in 2017-2018, now hovers around 8%.
Data compiled by the Center for Monitoring Indian Economy seems to indicate that unemployment rose from 6.6% in January last year to 8.3% in December 2022. However, it fell by just 7, 1% on January 29, although urban unemployment remained high at 8.6%.
In eastern India, unemployment remained high at 19.1% in Bihar, with Jharkhand neck and neck at 18% for December 2022. West Bengal reported a much lower figure of 5.5 %, but economists say this is partly due to the success of its rural jobs program, which had 10.33 million active workers, in addition to the “export” of labor from the construction to other states.
“There is a greater formalization of the economy on the one hand and an increase in the informal sector…in the process, MSMEs have been crowded out and that is what has affected the labor market and the quality of jobs. jobs,” said Dr Sen.
The problem, economists suspect, is that with the decline of the MSME sector, urban unemployment has risen. The last national MSME sample survey was conducted in 2015-2016, and it showed that the number of employees in this sector was 110 million.
Economists fear that the number of jobs in the sector has fallen by 10-15% since then, although figures are not available as the ONSS has not compiled any data since 2016.
Even the formal economy represented by large companies has not been spared.
Rupak Mukherjee, 33, worked for British Telecom but had to quit just as the pandemic began. Since then, he has tried his hand at real estate brokerage before finally landing a job last year with the Indian multinational Wipro.
“Obviously there were compromises made by everyone… the job market is still sluggish,” said Mukherjee, who lives a few blocks from the famous Kalighat temple.
“The manufacturing sector has not revived as we would all like to see. As the service sector led by IT companies rebounded, it is once again shedding jobs. Tech companies fear there will be a slowdown and guard against that day,” said Professor Biswajit Dhar, former director general of Research and Information System for Developing Countries, a Delhi-based think tank.
News reports quoting human resources experts predict that between 80,000 and 1.2 million tech jobs could be lost in 2023, in part because these companies overhired after the pandemic subsided and in part because artificial intelligence is replacing humans for entry-level jobs.
Dhar believes that the only way to revive “prosperity, jobs and job quality” is to facilitate and invest in the manufacturing sector. “More projects will create demand for manufactured goods and that will create jobs,” he said.
CMIE data suggests that projects worth Rs 1.4 lakh crore have been completed in the private sector so far, which could reach Rs 2.6 lakh crore by the end of the financial year , compared to more than 3 lakh crore before the pandemic in 2018-19 and 2019-20.
This means that although private companies have increased their spending to add production assemblies, they are not spending as much as before, creating fewer jobs than before.
Prof Dhar believes the way forward is to expand and improve the productivity-linked incentive program to help create more factories, while Dr Sen advocates making loans to MSMEs more flexible.
“Some spectacular failures of NBFC have scared off the non-banking financial sector, which is the monetary mainstay of these small businesses and their funding has dried up despite state-mandated MUDRA loans,” Dr Sen said.
To aggravate the misfortunes of the common man. consumer inflation averaged 6.8% last year.
“Sometimes I dip into my savings to live…everything has become more expensive, from transportation to food to clothes,” Mukherjee said.
To make matters worse, income levels in most jobs haven’t increased much since the start of the pandemic. Although the pay cuts instituted at the start were reinstated, inflation ate away at incomes.
“Until we are able to create more jobs, a slowdown in demand can be expected to compound our economy’s woes as incomes do not rise and inflation erodes. purchasing power,” warned Dr Sen.