COVID-19 & Global Crisis: Unemployment Rate At Its Peak

Jun 8, 20203 min read

|By- Janvi Merchant|

After reports of India’s first case of coronavirus in Kerala in late January, India introduced rigorous airport screening followed by regular health check-ups to battle increasing rates of infection. The following weeks marked important events such as suspension of travel and tourism as well as the announcement of a one-day Janata Curfew followed by another announcement of a twenty-one day lockdown period. Despite the efforts, the impact of COVID-19 continued to be on high rise due to which most Indian citizens were confined to their homes. Additionally, the lockdown caused a major setback for migrant labourers, farmers and lower working class as they were left jobless over the nights with little to no transportation measures to move in or out of any of the states. Industries in India that are affected the most during the ongoing pandemic include Production, Manufacturing, Mining, Construction, Financial Services and most importantly the Travel and Tourism industry with rates of decline hitting up to 23%. As the lockdown extended, the retail food delivery services also suffered a severe hit leading to suspension of their services from various companies such as Amazon India, Swiggy, Flipkart.

Despite the dire situation, the ongoing pandemic caused a boom in the online market industry, while digital transactions and payments saw a new scope in the Indian business market. Most Indians engaged themselves in household chores as well as cooking which was reportedly the most widely practiced activity during the lockdown. On the other hand, the most devastating impact was on the backward labourers who had restricted access to proper healthcare services, food, shelter and various other resources. In order to support the needs of these people, the government launched several programmes and campaigns such as the NSAP, PMJDY,NREGA and PM-KISAN.

Under the Pradhan Mantri Garib Kalyan Package, the finance minister of New Delhi stated that around 42 crore people have received financial assistance of Rs 53,248 crore till June 2, 2020. As part of the Pradhan Mantri Garib Kalyan Package, the government also announced free food grains and cash payments for all the poor senior citizens, women, and the socially backward classes. Additionally, Rs 10 crore has also been credited to 98.33% of the socially backward women’s Jan Dhan account holders at first installment. The government also disbursed around Rs 2,814.5 crores to about 2.81 crore senior citizens, widows and disabled persons. While 2.3 crore building and construction workers received financial support of up to Rs 4,312.82 crore.

Following table gives a brief about the government schemes in India

The job market has been disoriented not only in India but also worldwide where 30 million workers are left jobless in the United States and 1.76 million in Japan. Although several government agencies have softened the rise in unemployment by giving friendly donations and wages to all the needy who have suffered the loss of their jobs, the international labour association warns the public of the possibility of almost 25 million layoffs if the virus isn’t controlled promptly.

Evolving unemployment rate all around the world:

1. US – by the late April, around 3.8 Million Americans made an unemployment claim.

2. CANADA – more than 7.2 million people applied for emergency unemployment assistance.

3. JAPAN - In March, unemployment rates were at 2.5%, with around 1.76 million unemployed – an increase of 20,000 from the same month in 2019.

4. UK - Unemployment rates at around 4% while a quarter of UK’s workforce has registered for a government scheme that pays 80% of the wages.

5. FRANCE - More than 10 million workers in France’s private sector are being supported by the state, through a scheme called chômage partiel (partial employment or short-time working).

6. GERMANY – unemployment rates are still on the rise leading the population of those left jobless up to 5.8%.

7. ITALY – Unemployment rate dropped to 8.4%, its lowest level for almost 9 years.

“Nobody must lose their job because of the coronavirus,” Italian Economy Minister Roberto Gualtieri said, with the government pledging around €75 billion euros of support for families and companies.

Covid – 19 has caused massive impacts financially, socially and economically.