COVID 19 AND LOSS OF EMPLOYMENT

On March 11, 2020, the World Health Organization declared that COVID-19 was a global pandemic, indicating significant global spread of an infectious disease. At that point, there were 118,000 confirmed cases of the coronavirus in 110 countries. China had been the first country with a widespread outbreak in January, and South Korea, Iran and Italy following in February with their own outbreaks. Soon, the virus was in all continents and over 177 countries, and as of this writing, the United States has the highest number of confirmed cases and, sadly, the most deaths. The virus was extremely contagious and led to death in the most vulnerable, particularly those older than 60 and those with underlying conditions. The most critical cases led to an overwhelming number being admitted into the intensive care units of hospitals, leading to a concern that the virus would overwhelm local health care systems.

As the deaths rose from the virus that had no known treatment or vaccine countries shut their borders, banned travel to other countries and began to issue orders for their citizens to stay at home, with no gatherings of more than 10 individuals. Schools and universities closed their physical locations and moved education online. Sporting events were canceled, airlines cut flights, tourism evaporated, restaurants, movie theaters and bars closed, theater productions canceled, manufacturing facilities, services, and retail stores closed. In some businesses and industries, employees have been able to work remotely from home, but in others, workers have been laid off, furloughed, or had their hours cut.

All the dictums that had pegged the rise and fall of careers to skill and hard work, can now add a new attribute: corona virus. An invisible factor that can spring up suddenly to not only make or break careers, but also wreak havoc on lives and livelihoods. Since the beginning of this year, when the microscopic virus popped up on the global scene, it has altered the economies and budgets of nations and individuals worldwide.


In India, the lockdown since March-end has seen the country and industries come to a grinding halt, wiping out startups, bringing small and medium scale businesses to the cusp of collapse, sowing widespread unemployment and salary cuts, and altering the workplace and lives of millions of employees. While the International Labour Organisation (ILO) estimates the loss of full-time jobs worldwide to be 305 million, in India, the total number of jobs likely to be impacted is 136 million, as per the National Sample Survey and Periodic Labour Force Survey.

As companies try to ensure their survival by cutting costs, many have resorted to slashing salaries and laying off people. Others have put employees on indefinite leave without pay or put freshly hired staff on hold. According to an online survey conducted by the Economic Times on the impact of Covid-19, as many as 39% of the 3,074 respondents who took the survey are facing a salary cut, while 15% are set to lose their jobs. Despite the fact that 15% respondents are facing a salary cut of more than 25%, almost 43%of these are likely to continue with their current jobs and not look for new ones.

Companies are slashing salaries or laying off people in the short term to be able to survive by cutting costs. It is in the employees’ interest that the company survives to ensure job security.

Gross treatment to migrants comes along with massive job loss, historically low wage rates, little job or social security and subsistence level existence of millions of Indian workers. This is hardly an ideal situation to recover or rebuild the economy.

The Centre for Monitoring Indian Economy (CMIE), the only agency tracking unemployment in India, said (i) 18 million salaried employees lost their jobs (from 86 million in 2019-20 to 68 million in April 2020) and (ii) another 18 million business persons (larger entrepreneurs with fixed assets) lost employment (from 78 million in 2019-20 to 60 million in April 2020). This is apart from millions of daily wagers losing their jobs.

There was an overall drop of 30% jobs in April & May 2020 (from an average of 404 million in 2019-20 to 282 million in April). Larger entrepreneurs reporting job loss is disturbing because it reflects that they think their “business is destroyed for all practical purposes”, says the CMIE report. So the loss is not just of jobs but also of enterprises, the job creators.

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