From Migration to Unemployment

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India is a labor abundant country, where every year millions enter into labor force. However, due to lack of adequate jobs in the labor market hiuge labor force still remain unemployed in the country. Nevertheless, Indian economy is predominantly a rural based economy, where two thirds of population and 70 percent of workforce is living in rural areas. Nonetheless, earlier the agriculture sector was a major source of livelihood to a vast chunk of rural people, but with the decline in the share of agricultural sector in Gross Domestic Product (GDP), as well as decline in the land holdings among small and marginal landholders has led to sectorial changes in the country. Hence, a massive flow of labor from rural to urban areas in search of better employment and livelihood. These migrant labors include self-employed persons, regular workers, daily wage workers, rickshaw pullers, street vendors, shop owners etc. Therefore, labor migration is a survival strategy of people, especially of rural people to combat poverty and un-employment. The assessment of the effects of migration on rural areas has remained relevant, since migration acts as a catalyst in the transformation process of not only the destiny of individual migrants, but also the conditions of family members left behind, local communities, and the wider sending regions.

However, with this global health crises of Covid 19 bulk of migratory labor has shifted back from urban areas to their native places, which led to the unemployment of millions of labors in the country. Narendra Modi has announced 21 days of lock down in the country, in order to protect the citizens from the spread of Covid-19 disease. However, the coin has two sides. One, lockdown will protect the entire country from spreading Covid-19 epidemic and the other, the country will face huge consequences with this lockdown. The economic growth rate of country has already declined drastically in the last year. However, with this economic shutdown, India’s growth rate will decline further and there are predictions that the growth rate in this quarter will fall to zero or even will go negative. The lockdown will create huge job destruction in many sectors and also will lead to industrial sickness to many industrial units. Further, the shift of migratory labors from labor market will create sectorial disturbances and jobs will get skewed from sector to sector in India. Moreover, this lockdown will hit hard the earnings of daily wage workers, who are working for subsistence wage rates and will push them further into poverty and misery. Apart from this, the Rabi season is at its peak, the Rabi crops are ready for harvesting. However, due to this Covid-19 crisis, the agricultural labors are unable to work in the fields, and are remaining unemployed. This will damage the crops and will further lead to food crisis in the country. Nonetheless, as per International Labor Organization (ILO), the economic and labor crisis created with this Covid-19 pandemic could increase global unemployment by almost 25 million. However, in case of India there are expectations, that around 400 million people, who are working in the informal sector are at risk of falling into poverty and 195 million will lose their jobs in the second quarter of this year. Underemployment is also expected to increase at a large scale, jobs crisis could increase inequalities in the country. Further, starvation and hunger will lead to many suicides and deaths of poor workers and other people, because still yet a vast chunk of labors, which includes daily wage workers, rickshaw pullers, rag pickers, slums dwellers etc. are living in below poverty line, who are be unable to meet with daily food requirements, and will die with hunger and starvation. Therefore, taking Covid-19 only a health crises is not accurate to say or what we can say is that Covid -19 is no longer only a global health crisis, but it has become an economic crises, as well as labor market crises of both developed and developing countries of the world. However, the developed countries may face its negative impact only in short run, while developing countries particularly India which is having surplus labor force will face its consequences on long run too.

Suhail Ahmad Bhat is Doctoral Fellow in Economics at Babasaheb Bhimrao Ambedkar (a Central) University Lucknow