The novel corona virus which originated in China, up till now has no vaccine or cure and has affected more countries than both the world wars did. In the times when social distancing and isolation are the most pertinent solutions for the containment of the virus, challenges for a country like India, having a population of 1.3 billion are extraordinary. COVID 19 is not only imposing a threat to public health but also leading to a sudden interruption of business operations across India. The brunt of the virus is being faced by the entire country but the impact on the earnings of the laborers is particularly appalling. Thousands of the laborers have headed home on foot after the national lockdown, clearly reflecting their uncertainty and high chances of acute shortage of labor once the restriction is over. The statement of ILO director Guy Ryder is very symbolic in this context and highlights the urgency with which this matter needs to be dealt with. According to him, “There is no longer only a global health crisis, it is also a major labor market and economic crisis that is having a huge impact on people.” It’s extremely concerning to see how coronavirus has a multifaceted impact on marginalized people. Many have seen a reduction or complete loss of livelihood. The government can’t afford to linger on this issue which requires immediate investigation and a cohesive approach to address the problem of labor impacted by the lockdown. There are various dimensions related to the labour problem that deserve a critical analysis as specified below.
Devastating impact on the “Gig Economy”
The pandemic has a crumbling impact on the economy and has left the government with very hard choices to contain the spread. Undoubtedly, prioritizing national health through complete lockdown comes at the huge cost of economic crisis. While certainly, there are some doubts about how badly India will be affected by the virus but surely there is a certainty that the lockdown will hit the poor badly. Many organizations and institutions are making working from home mandatory and are continuously involved in creating policies to support their employees. Though the incentive of various enterprises is highly appreciable, the same security can’t be claimed for the workers who can’t perform their job digitally. Furthermore, the policy which has been initiated to curb the spread of the virus, imposes a serious threat to the life of agriculture, construction and many other casual workers by severely skewering their everyday livelihood and pushing them towards subsistence.
Despite the government taking carious measures to protect different stakeholders, the continuing restrictions have brought enormous downturn impacts for the whole economy. However, the farm economy is one of the sectors where the impact is immediate. Moreover, the national lockdown arrived amid harvesting time of Rabi crop and the unexpected migration of labor to their native places severely impacted the harvesting. This is also a time when farm produce reaches mandi’s for assured procurement but couldn’t, or reached with utmost difficulty, due to the lockdown imposed. Meanwhile, the poultry farmers have been hit badly due to misinformation on social media that chicken and other poultry products are the carriers of COVID 19.
Similar disrupting impact of COVID 19 can be seen for Supply Chain Management. The supply chain completely depends on manpower and is the backbone of logistics. However, as the lockdown is mandated by the government, there is a dearth of labor in factories, warehouses, in transportation and distribution. With the lockdown, as well as increasing instances of return and fear among the workers, the entire supply chain came to a halt. Orders are lying pending with the companies as there is a shortage of blue-collar workers to pick and deliver the order and hence weakened the smooth flow of trade.
Undoubtedly, the epidemic has affected all the walks of life but hit the poor hardest. The scenario is worse for the employees who don’t have regular salaries. For example, as International travel restrictions remain imposed and visas banned by the government for some time the Tourism and Hospitality Industry remain in a dire state. Most of the tourism workers are either employed on a short-term contract or even without them as daily wage. Apart from Tour guides, it includes drivers, parking contractor, cleaners, the waiters in the restaurants proximate to touristic sites, vegetable supplier, flower suppliers and other staff in the hotel, etc. And with no future possibility of having tourists before mid-September 2020, there is a big question on the survival of drivers and guides whose minimum wages and tips have now collapsed.
The impact is somehow similar for Construction Industries also. Construction workers constitute a major chunk of the India’s informal workforce. They are the most vulnerable as they were one of the first ones to be laid-off after the lockdown. There is a projection that projects worth Rs. 59 lakh crores ( 782 billion US dollars ) are under construction and may be badly affected due to COVID 19. The breakdown of the supply-demand ecosystem and the non-availability of raw material supplies further adds to a problem and seems a herculean task for the builders to manage. Unfortunately, the future of 4.9 crore (49 million) construction workers are at risk which is further going to have a multiplier impact on the workers of 250 allied industries. The problem of Infrastructure Companies is further aggravated as monsoons will arrive soon, which have a grim impact on construction productivity.
It’s a tough time for all the business but especially the pandemic and lockdown has been a horrifying time for all small businesses and SMEs whose future is clouded with utmost uncertainty. Over the years, SMEs have been a strong pillar to Indian economy and represented 60-70 per cent of the jobs of the developing country. However, they simply are not able to survive if the step to boost an industry is not taken on an urgent basis. At present, the risk for small businesses is bigger, as most of them are facing a liquidity crisis which is going to wipe out the whole segment very soon. Plunging demand and delayed payment for orders further have pushed them to a vulnerable situation. Also due to low cash reserves, their ability to pay their employees is tremendously affected leading to retrenchments and distress in the lives of millions of workers.
Continues in part 2: “Digital Underclass” at risk: Plight of Informal Labours – Part 2
Guest Author Bio
Dr. Neha Nainwal
Dr. Neha Nainwal is an Assistant Professor at University of Delhi. She has teaching experience of more than seven years. She received her P.HD in commerce from Delhi school of economics, University of Delhi. Her primary specialization was Development economics and her secondary specialization involves financial inclusion, Agriculture and labor. She also authored more than ten research papers and presented papers in many international and national conferences. She also worked as a content writer for than 20 modules for HRD Ministry project “E- PG pathsala”. She has also authored various article for many national level magazine.