Relieving Labour’s Pain: Larger MGNREGA allocation, social security scheme needed

During the lockdown, 61% of working men remain employed and 7% lost employment while only 19% of women workers remained employed while a whopping 47% suffered a permanent job-loss at the end of 2020.”>During the lockdown, 61% of working men remain employed and 7% lost employment while only 19% of women workers remained employed while a whopping 47% suffered a permanent job-loss at the end of 2020.

How direly the second Covid-19 surge, and a looming third wave, in the country will imperil employment/livelihood and income security of workers is clear from a new report by researchers at the Azim Premji University (APU). The State of Working India 2021 underscores the crushing impact of Covid-19, over March – December 2020, on the worker population.

The Indian economy had been slowing down even before the pandemic, and suffered from low job creation and chronically poor working conditions for a large chunk of the labour force, with little focus on social security for most. The pandemic and the responses it elicited from policymakers—the APU researchers show analysing data from the Centre for Monitoring of the India Economy, the university’s own CLIP survey and the India Working Survey—exacerbated this situation, leading to even greater informalisation of the workforce. The researchers estimate nearly 15 million workers were unable to find work at the end of 2020, from the 100 million that lost jobs in the April – May 2020 lockdown. Though a large chunk of workers did find work again, this was largely with much lower remuneration; the monthly per capita income for an average household of four members in October 2020 was a fifth lower than what it was in January 2020, at `4,979. Joblessness and reduced income have meant labour’s share of GDP dropped from 32.5% in Q2 FY20 to 27% in Q2 FY21. The pandemic-crisis has affected women workers far worse than men, which should have klaxons ringing in the policy circles given India has been seeing shockingly low rates of women’s participation in paid work. During the lockdown, 61% of working men remain employed and 7% lost employment while only 19% of women workers remained employed while a whopping 47% suffered a permanent job-loss at the end of 2020. Those that could hold on to their jobs saw the burden of domestic work increase sharply without any reduction in employment hours. The pandemic has also disproportionately affected younger workers, who experienced higher job losses—33% in the 15-24 age group had failed to get employed again by December 2020 versus 6% of those in the 25-44 years age group. The lockdown—APU researchers estimate that every 10% decline in mobility caused a 7.5% drop in incomes—left workers much more vulnerable, with half of formal, salaried workers having to move into informal work between late 2019 and late 2020; predictably, low-wage work in agriculture, construction and petty trade were the sectors previously income-secure workers were pushed into.

The government needs to quickly step up support to alleviate both, the damage from the last year and what is expected to accrue from the current surge. The Union government will need to make larger allocations to MGNREGA while PDS and Jan-Dhan can be used to mitigate immediate pain. And, as this newspaper has pointed out several times, the government needs to come with a scheme to ensure social security and old-age support for workers.