Home >Industry >Human Resource >Urban job losses on the rise again

Urban unemployment, having fallen for four straight weeks, has reversed course and risen in the week ended 5 July, in tandem with the renewed lockdown in parts of India, according to a survey.

Joblessness in urban areas climbed to 11.26% in the week ended 5 July from 10.69% recorded in the preceding week, according to a Centre for Monitoring Indian Economy (CMIE) survey.

The increase comes after Karnataka, Tamil Nadu, Assam, West Bengal and Maharashtra imposed fresh curbs on urban activity in the previous week—either in part or fully and for periods ranging from throughout the week to during the weekend.

Economists said the continuing struggle by cities to deal with covid-19, the sub-optimal functioning of industries, the lingering pain of micro and small enterprises and the lack of demand in the market are impacting the overall jobs environment.

“Formal sector jobs in cities will take months to come back, largely because industrial activities have not picked up due to several factors such as health, labour shortage, and the time it is taking to recover from the business loss. Every stakeholder needs to make an effort, and the situation will slowly improve," said K.E. Raghunathan, past president of All India Manufacturers Organisation, a federation of micro, small and medium enterprises (MSMEs).

Raghunathan said since migrants have returned to their villages, the industrial belts do not have enough workforce—“but our understanding is that it will take at least six months before most of the migrants return".

“Where is the demand in the market to accelerate formal sector employment generation? The income loss and job loss for people in several sectors have created a lot of pain points," said K.R. Shyamsundar, a labour economist and professor at XLRI Jamshedpur.

Shyamsundar said plummeting incomes have left the salaried class struggling, which will have both a short- and long- term impact on the economy. For example, 85% of households in the national capital region of Delhi have reported some level of income loss due to the lockdown, according to a survey by the National Council of Applied Economic Research published last week.

“Progress of recovery of jobs has been the weakest among salaried employees. While 17.7 million salaried jobs were lost in April, this loss increased to 17.8 million in May. In June, there was a recovery of 3.9 million salaried jobs. This is the lowest increase in jobs," CMIE wrote on its website, explaining the June monthly employment data last week.

The CMIE data shows both rural and overall joblessness rate climbed marginally for the second consecutive week. While the rural unemployment rate climbed to 7.78% in the week to 5 July from 7.68% in the previous week, the national unemployment rate increased to 8.87% in the week to 5 July against 8.59% in the week ended 28 June.

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