India\u2019s urban unemployment soared during the COVID-19 pandemic, soaring to 20.9% in the April-June 2020 quarter
\nMUMBAI
\nOn a hot summer afternoon, 23-year-old Nizamuddin Abdul Rahim Khan is playing cricket on a muddy, unpaved road in the Rafiq Nagar slum in India\u2019s financial capital, Mumbai.
\nHere, there is scant evidence of India\u2019s fast-growing economy.
\nBordering what was once Asia\u2019s largest garbage dumping ground, Rafiq Nagar and surrounding areas are home to an estimated 800,000 people, most living in tiny rooms across narrow, dark alleys.
\nThe young men and women in the area struggle to find jobs or work, and they mostly dawdle the day away, said Naseem Jafar Ali, who works with an NGO in the area.
\nIndia\u2019s urban unemployment soared during the COVID-19 pandemic, reaching a high of 20.9% in the April-June 2020 quarter, while wages fell. While the unemployment rate has fallen since fewer full-time jobs are available.
\nEconomists say more and more job-seekers, especially the young, are looking for low-paid casual work or falling back on unreliable self-employment, even though the broader Indian economy is seen growing at a world-beating 6.5% in the financial year ending in March 2024.
\nIndia is overtaking China to become the world\u2019s most populous nation with over 1.4 billion people. Nearly 53% of them are under 30, its much-touted demographic dividend, but without jobs, tens of millions of young people are becoming a drag on the economy.
\n\u201cUnemployment is only the tip of the iceberg. What remains hidden beneath is the serious crisis of underemployment and disguised unemployment,\u201d said Radhicka Kapoor, a fellow at the economic research agency ICRIER.
\nKhan, for instance, offers himself as casual labour for home repairs or construction, earning just about 10,000 Indian rupees ($122) a month to help support his father and his four sisters. \u201cIf I get a permanent job, then there will be no problem,\u201d he says.
\nThe risk for India is a vicious cycle for the economy. Falling employment and earnings undermine India\u2019s chances to fuel the economic growth needed to create jobs for its young and growing population.
\nEconomist Jayati Ghosh calls the country\u2019s demographic dividend \u201ca ticking time bomb.\u201d
\n\u201cThe fact that we have so many people who have been educated, have spent a lot of their own or family\u2019s money but are not being able to find the jobs they need, that\u2019s horrifying,\u201d she said.
\n\u201cIt\u2019s not just the question of potential loss to the economy…it is a lost generation.\u201d
\nSmall businesses collapse
\nUnemployment is far more acute in India\u2019s cities, where the cost of living is high and there is no backup in the form of a jobs guarantee programme that the government offers in rural areas. Still many in the army of rural unemployed flock to the cities to find jobs.
\nWhile urban unemployment was at 6.8% in the January-March quarter, the share of urban workers with full-time jobs has declined to 48.9% as of December 2022 from an already low 50.5% just before the start of the pandemic, government data shows.
\nThis means that of the estimated urban workforce of about 150 million, only 73 million have full-time jobs.
\nFor people in urban areas with full-time jobs, average monthly wages, adjusted for inflation, stood at 17,507 rupees ($212) in the April-June 2022 quarter – the latest period for which government data is available.
\nThis was a modest 1.2% higher than the October-December 2019 period, before the start of the pandemic.
\nBut for the self-employed, incomes have fallen to 14,762 ($178.67) rupees in the April-June 2022 quarter, according to research by Ghosh and C.P. Chandrashekhar, both at the University of Massachusetts, Amherst. It was at 15,247 rupees in the October-December 2019 quarter.
\n\u201cThe big thing that has happened is the collapse of small businesses, which were the backbone of employment,\u201d said Ghosh.
\nSince the Indian government decided to demonetise 86% of the country\u2019s currency in circulation in 2016, there have seen continuous attacks on the viability of the small business, with the pandemic being the latest, she said.
\nOver 10,000 micro, small and medium enterprises shut in 2022-23 (April-March) alone, the government said in parliament in February. In the previous year, over 6,000 such units had shut down. But the government did not specify whether any new enterprises were set up in those periods.
\nGraduate painter
\nMany families in Khan\u2019s neighbourhood, typical of the urban sprawl in the city of 21 million, have been hit by job losses and lower incomes in recent years. Young workers are particularly vulnerable.
\nArshad Ali Ansari, a 22-year-old student, said he saw his brother and sister lose their jobs soon after the start of the pandemic.
\nSitting in a single room with a kitchen attached, where his family of eight lives, Ansari said they survive on his 60-year-old father\u2019s earnings of about 20,000 rupees a month.
\nHis brother, who was a graduate and had worked in a bank, lost his job during the pandemic and had to join their father in painting houses.
\n\u201cMy brother had education, he had experience,\u201d Ansari said. <\/p>\n","protected":false},"excerpt":{"rendered":"
India\u2019s urban unemployment soared during the COVID-19 pandemic, soaring to 20.9% in the April-June 2020 quarter MUMBAI On a hot summer afternoon, 23-year-old Nizamuddin Abdul Rahim Khan is playing cricket on a muddy, unpaved road in the Rafiq Nagar slum in India\u2019s financial capital, Mumbai. Here, there is scant evidence of India\u2019s fast-growing economy. Bordering […]<\/p>\n","protected":false},"author":2,"featured_media":334440,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-334405","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world"},"yoast_head":"\n