Women and youth bear the brunt of covid-induced unemployment

In April, the unemployment rate was the highest since December 2020, when it had stood at 9.06%. Let’s look at the figures in a little more detail.

1) The brunt of the increase in unemployment has been borne by women. The rate of unemployment among women has jumped to 17% in April from 12.8% in March. When it comes to men, the rate has jumped from 5.7% to 6.93%. The rate of unemployment among urban women was at 23.6%. This shows that there is a tendency among employers to fire more women than men when things get difficult.

2) The labour participation rate for April fell to 39.98% against 40.17% in March. This is the lowest since May last year when it was 38.57%. Labour participation rate is the ratio of the labour force to the population greater than 15 years of age. The labour force, as CMIE defines it, consists of people who are 15 years or older and are employed or are unemployed and are willing to work and are actively looking for a job.

What does a falling labour participation rate? It means that many unemployed people have been unable to find a job and have now stopped looking for one and hence, dropped out of the labour force. So, they are unemployed, but they are not counted as unemployed because they are not looking for a job.

If we include such people, the greater unemployment rate, as it is referred to, stood at 12% for April. For men, it was at 9.39%, and for women, it was 31.25%.

3) The good thing is that the employment situation during the second wave isn’t as bad as it was during the first wave. The total number of people unemployed in April and looking for a job stood at 33.9 million. It was 86.8 million in April last year. A simple explanation for this lies in the fact that the lockdown last year was nationwide, whereas the lockdowns and curfews this year are more localized. Even in places that have been placed under lockdown, a lot of economic activity has been allowed.

Also, given that the second wave of covid has been deadlier, it is safe to say with 100% benefit of hindsight that the complete lockdown of last year was an overreaction. It was something that the country should have done without.

4) When it comes to the total number of unemployed people looking for a job and the total number of unemployed people not looking for a job, or the greater unemployed, the number stood at 53.3 million in April. It was at 43.7 million in March, implying an increase of around 9.6 million individuals.

5) The rate of unemployment is the highest among the youth. The rate in April stood at 62.5% for those in the age group 15-19, 42.2% for those in the age group 20-24 and 12.52% for those in the age group of 25-29. For 30 and beyond, the rates of unemployment are minimal.

In fact, between March and April, of the overall increase in the number of unemployed people still looking for a job, around 83.8% were less than 30 years of age. What does this mean? It implies that when employers fire workers, they choose younger employees with fewer years of experience, particularly women.

In May, the unemployment rate is likely to go up further, with the lockdowns and curfews being extended in states and being introduced in several others. If we look at the weekly data published by CMIE, the unemployment rate was already at 8.19% as of 2 May. It will only go up from here, with the youth and women bearing the brunt of it.

Vivek Kaul is the author of Bad Money.