Employment, unemployment fall together in November; 50 lakh workers vanish from job market

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December 10, 2020 12:30 PM

The labour is getting discouraged by the lack of jobs on offer and is exiting the active labour markets.

jobs, employment, unemployment, labour force, CMIEIn the first three weeks of December, more workers joined the workforce in the search of jobs.

The wheels of the economy have started to turn faster but the employment is yet to match the pace of economic recovery. The employment fell in India for the second consecutive month in November 2020. In October, the count of the employed had fallen by 0.1 per cent (60 lakhs), while in November, the fall was larger at 0.9 per cent (35 lakhs), according to the Centre for Monitoring Indian Economy. The recovery in employment, from the steep fall during the April lockdown was smart initially but, it slowed down well before the recovery was completed. In fact, the recovery progressively slowed down in July, August and September before reversing in October and November. 

CMIE added that it appears that the recovery phase is over and a decline is setting in again. It is interesting to note that the number of persons who report themselves as unemployed and are also actively looking for work has also been declining. While employment began stagnating and then even declining, the count of the unemployed did not rise. On the contrary, it declined. This is an anomalous behaviour of labour where, even if employment does not rise, the count of the unemployed keeps declining, the report underlined. 

The findings suggest that the labour is getting discouraged by the lack of jobs on offer and is exiting the active labour markets. Consequently, in spite of partial recovery, India is bearing the brunt of falling employment and witnessing falling unemployment together. The sustained loss of jobs and also the apparent falling wage rates or income levels is discouraging workers from remaining the labour markets. The shrinking of the greater labour force indicates that around 50 lakh potential workers have left the labour force entirely, which is worrying.

Meanwhile, the government has also been working to alleviate the job crisis. On  Wednesday, the Union Cabinet approved an expenditure of Rs 1,584 crore for the current financial year for Atmanirbhar Bharat Rojgar Yojana (ABRY). The cabinet also approved Rs 22,810 crore for the entire scheme period 2020-2023. The Rozgar Yojana scheme is introduced to boost employment in the formal sector and incentivize the creation of new employment opportunities during the Covid recovery phase under the Atmanirbhar Bharat package.

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