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Global Employment losses

  • Category
    Economy
  • Published
    30th May, 2022

Overview

  • What are the outcomes of the report?
  • Need for analysing trends
  • Global condition
  • India’s scenario in the report
  • Challenges for India
  • Way forward

Context

According to the recent report by International Labour Organisation (ILO),says that the number of hours worked globally dropped in the first quarter of 2022.

  • It further dropped to 3.8% below the employment situation before the pandemic.

Background

  • The fresh lockdowns in China, the conflict between Ukraine and Russia, and the global rise in the prices of food and fuel are cited as the main reasons for such findings of the report.
  • Financial turbulence, potential debt distress and global supply chain disruption points at a growing risk of a further deterioration in hours worked in 2022.
  • The “great and growing divergence between richer and poorer economies” continues to characterise the recovery, which is the cause of concern for the society.
  • While high-income countries experienced a recovery in hours worked, low- and lower-middle-income economies suffered setbacks in the first quarter of the year with a 3.6 and 5.7 per cent gap respectively when compared to the pre-crisis benchmark.
  • This information shows the need to analyse the reason for its happening, under various global as well as internal factors for India.

Analysis

Global scenario

  • After significant gains during the last quarter of 2021, the number of hours worked globally dropped in the first quarter of 2022, to 3.8% below the employment situation.
  • Job loss: About 11.2 crore jobs might have been lost during this period, according to the report.
  • The growing divergence between richer and poorer economies: While high-income countries experienced a recovery in hours worked, low- and lower-middle-income economies suffered setbacks in the first quarter of the year with a 3.6 % and 5.7% gap respectively when compared to the pre-crisis benchmark.
  • Reason for reduction of working hours: The fresh lockdowns in China, the conflict between Ukraine and Russia, and the global rise in the prices of food and fuel.
    • Financial turbulence, potential debt distress and global supply chain disruptions are growing risks of a further deterioration in working hours in 2022.

Findings related to India

  • Job loss: For every 100 women at work prior to the pandemic, 12.3 women would have lost their job as an average through the entire period. In contrast, for every 100 men, the equivalent figure would have been 7.5.
    • Hence, the pandemic seems to have exacerbated the already substantial gender imbalances in employment participation in the country.
  • Deterioration of the gender gap in work hours: India and lower-middle-income countries excluding India experienced a deterioration of the gender gap in work hours in the second quarter of 2020.
  • Working standards: The report mentions that there is no decent employment in India. This is because:
    • Most people are on contract without any social security. If there are no decent wages, purchasing power will also come down,
    • The Code on Wages was passed in 2019 but is not yet implemented,
    • The Wage Committee in 1948 asked the government to implement a minimum wage, living wage and a decent wage. But, India did not implement even minimum wage due to pressure from industrialists.

About International Labour Organization

  • The International Labour Organization(ILO) is a United Nations agency whose mandate is to advance social and economic justice through setting international labour standards. Founded in October 1919 under the League of Nations, it is the first and oldest specialised agency of the UN. The ILO has 187 member states: 186 out of 193 UN member states plus the Cook Islands.
  • It is headquartered in Geneva, Switzerland.
  • Working: Within the UN system the organization has a unique tripartite structure: all standards, policies, and programmes require discussion and approval from the representatives of governments, employers, and workers. This framework is maintained in the ILO's three main bodies:
    • The International Labour Conference, which meets annually to formulate international labour standards;
    • the Governing Body, which serves as the executive council and decides the agency's policy and budget; and
    • The International Labour Office, the permanent secretariat that administers the organization and implements activities.

Challenges for India

  • Social Factors: In India the caste system is prevalent. The work is prohibited for specific castes in some areas.
  • Rapid Growth of Population: Constant increase in population has been a big problem in India.
    • It is one of the main cause of unemployment and a tragedy to job losses.
  • Dominance of Agriculture: Still in India nearly half of the workforce is dependent on Agriculture.
    • However, Agriculture is underdeveloped in India.
    • Also, it provides seasonal employment. Thus job losses will make people deprive of alternatives for other employment.
  • Fall of Cottage and Small industries: The industrial development had adverse effects on cottage and small industries.
    • The production of cottage industries began to fall and many artisans became unemployed.
  • Immobility of Labour: Mobility of labour in India is low. Factors like language, religion, and climate are also responsible for low mobility.
  • Defects in Education System: Jobs in the capitalist world have become highly specialised but India’s education system does not provide the right training and specialisation needed for these jobs.
  • Thus many people who are willing to work become unemployed due to lack of skills.

Scope of Improvement

  • Promoting Labour Intensive Industries: There are a number of labour intensive manufacturing sectors in India such as food processing, leather and footwear, wood manufacturers and furniture, textiles and apparel and garments.
    • Special packages, individually designed for each industry are needed to create jobs.
  • Decentralisation of Industries: Decentralisation of Industrial activities is necessary so that people of every region get employment.
    • Development of the rural areas will help mitigate the migration of the rural people to the urban areas thus decreasing the pressure on the urban area jobs.
  • Drafting National Employment Policy: There is a need for a National Employment Policy (NEP) that would encompass a set of multidimensional interventions covering a whole range of social and economic issues affecting many policy spheres and not just the areas of labour and employment.
  • The underlying principles for the National Employment Policy may include:
    • Enhancing human capital through skill development.
    • Creating sufficient number of decent quality jobs for all citizens in the formal and informal sectors to absorb those who are available and willing to work.
    • Strengthening social cohesion and equity in the labour market.
    • Coherence and convergence in various initiatives taken by the government.
    • Supporting the private sector to become the major investor in productive enterprises.
    • Supporting self-employed persons by strengthening their capabilities to improve their earnings.

Conclusion

The gender gap in India’s employment scenario is mentioned in the report on the “world of work”.But we have a chance to improve our position by willing to consider the loopholes with collective efforts of Government and community.

Q1. Discuss the issue of unemployment in India. What India should do to check rising unemployment?

Q2. “Increasing Female LFPR in India is crucial not just to achieve economic growth but also to promote inclusive growth”. Comment.

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