The wage bill of over 1,500 listed companies recorded a mere 2.9 per cent hike, which is the slowest growth in wages recorded by listed companies in the past 18 years.
As coronavirus pandemic keeps businesses at a standstill, the wage bill of over 1,500 listed companies recorded a mere 2.9 per cent hike. This is the slowest growth in wages recorded by listed companies in the past 18 years. However, the condition differs across industries. While banks and security broking companies saw a hike of more than 13 per cent in wage bill, the manufacturing companies saw a 7 per cent fall, according to CMIE. Being a labour-intensive industry, the textile companies have seen the biggest hit of a 29 per cent contraction in the wage bill. The numbers also indicated that the textile industry witnessed a sharp fall in employment.
Another labour-intensive industry — leather — has also recorded a worrisome cut of 22.5 per cent in the wage bill in Q1 FY21. Further, automobile ancillaries reported a 21 per cent decline in its wage bill and the automobiles’ wage bill fell by 18.6 per cent. In the services sectors, the wage bill of the tourism industry shrank 30 per cent, and hotels and restaurants fell 20.5 per cent.
Condition of salaried jobs deteriorated even before pandemic
The salaried jobs are among the hardest-hit areas amid the coronavirus crisis as they were struggling even before the pandemic kicked in. Salaried jobs in India have stagnated in recent times. In 2017-18 they grew by 1.6 per cent and in 2018-19 they grew by a meagre 0.1 per cent before contracting by 1.8 per cent in 2019-20. Consequently, salaried jobs in FY20 stood at 86.1 million, which were lower than their level of 86.3 million in FY17.
With the disruptions caused by the virus and amid a season of major layoffs and salary cuts, the salaried jobs fell to 68.4 million in April 2020 and by July 2020, their count had fallen further to 67.2 million. Although the net result shows up as a marginal increase in the wage bill implying a very small loss of jobs, the data indicated big job losses in many industries in the first quarter of 2020-21. “CPHS estimates show a loss of 17 million salaried jobs in the quarter and we also know that this got worse in July,” CMIE added.