Economy

COVID-19 lockdown cost 80% informal sector workers their jobs: Survey

Besides being unemployed, workers had borrowed heavily and had not had enough nutrition during and after the lockdown, the report said

 
By Shagun Kapil
Published: Thursday 13 August 2020
80% informal workers lost employment due to COVID-19 lockdown: Report. Photo: Vikas Choudhary / CSE

That the novel coronavirus disease (COVID-19) pandemic and the India-wide lockdown to curb it had put millions into despair was known. Now a study has tried to put some figures to the context.

As businesses and factories remained shut, more than than 80 per cent workers in the informal sector lost employment, according to a recent survey by non-profit Action Aid India.

The exhaustive report was released on August 13, 2020. It is based on a survey conducted during the third phase of lockdown, between May 14 and May 22, under which over 11,530 workers across 21 states were interviewed.

Around 89 per cent of the total workers surveyed were working prior to the lockdown, four per cent were unemployed and approximately seven per cent were in the job market and in the process of looking for work, the report noted.

However, by the end of the third phase of lockdown, the percentage of working population fell to eight per cent and within a span of 60 days of lockdown, the unemployment rate had reached 78 per cent.

Of the people interviewed, 72 per cent were male, 28 per cent were female and 0.01 per cent identified with other gender identities. The report covers migrant workers both, in their destination states and source states, as well as those in transit.

It also covers non-migrant workers in both rural and urban areas. Of these, some had been able to resume work, but most others had lost their sources of livelihood.

The difference in the rate of unemployment was starker between migrant and non-migrant workers as around 81 per cent of migrant workers reported losing their livelihood, as opposed to approximately 71 per cent non-migrant workers.

Close to 78 per cent of workers in urban areas lost their livelihood as compared to 58 per cent in rural areas.

Seventy per cent workers in the agriculture sector, 84 per cent workers in the construction sector, 80 per cent workers in manufacturing and 76 per cent workers in the services sector reported losing their livelihood by the third phase of lockdown, the report said.

Close to half of the respondents said they had not received any wages and about 17 per cent had received only partial wages.

Besides widespread loss of livelihood, there was also a reduction in the intensity of work done on a weekly basis across all the sectors of the economy, the report showed.

“This is significant because it implies that even where work is still available, there is likely a continued loss of wages because working hours have decreased drastically. Unemployment rates do not capture this and therefore need to be seen in conjunction with this data,” the report said.

For instance, prior to the lockdown, close to 52 per cent of workers in the agricultural sector reported working more than 40 hours per week. During the lockdown, only around 12 per cent workers reported continuing to work more than 40 hours in a week.

The construction sector seems to have witnessed the most dramatic decline in the intensity of work. Prior to the lockdown, around 62 per cent of the workers worked for more than 40 hours a week, but during the lockdown, 71 per cent of workers reported that they worked zero hours.

Only around 12 per cent of workers stated that they worked for more than 40 hours after the lockdown was announced.

Indebtedness increases

Coupled with unemployment was a high incidence of indebtedness among these workers. Around 53 per cent workers (6,201 respondents) said they had incurred additional debt during the lockdown.

Close to 58 per cent of them reported they had borrowed money to meet their expenses during the lockdown. The incidence of debts for migrant workers was higher — 59 per cent of them reported that they had borrowed to meet their family expenses, compared to 54 per cent of workers who did not migrate for work.

This was concerning as it might have repercussions for poor households for years and months to come, the report said.

“Workers have not received much assistance by way of income transfers or wage compensation. The relief that they have been able to access in the form of cooked food, dry rations and sanitation material has not been enough to sustain them over several weeks of the lockdown. This has forced them to dip into their savings and borrow money to meet their expenses,” the report said.

People’s access to essential services also took a big hit. Only about a sixth of the respondents reported that their food consumption was ‘sufficient’. This is a large decline from before the lockdown when 83 per cent of them believed that their food consumption was sufficient.

There was a notable drop in the frequency of food consumption. When asked about the number of meals they were having in a day, 93 per cent of respondents said that they were eating two meals a day before the lockdown but only 63 per cent of respondents reported eating two meals in a day after the lockdown.

“There was also an alarming increase in the level of food insecurity and a decline in water consumption to a lesser extent. This was partly due to restrictions on movement but is largely indicative of the lack of food reserves in poor households, their inability to save and stock up and their low levels of enrolment and access to welfare schemes such as the public distribution system,” the report said.

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