OECD report highlights staggering job losses in advanced economies

Out of 7.18 crore households that availed of work under the rural job guarantee scheme from April 1, 2020, to March 26, 2021, over 60.80 lakh households had completed 100 days of employment.

Twenty-two million. That’s the estimated number of people pushed out of employment in the wake of the pandemic in advanced economies, as per the recent OECD (Organisation for Economic Cooperation and Development) report on global employment outlook in 2021. While achieving pre-pandemic employment levels, despite encouraging economic recovery, remains a far sight, there is a solid possibility that some jobs might be lost forever.

“Many of the jobs that have been lost during this pandemic crisis will not be recovered,” said Stephane Carcillo, head of OECD’s job and income division.

Green shoots for India

The journey to normalcy for the Indian economy, however, has some positives after all. The Economist Global Normalcy Index 2021, which accounts for around 90 percent of the global GDP and 76 percent of the total world population and tracks various indicators reflective of pre-COVID regularity like levels of transportation, recreation, retail and office activity, and more suggested that India is inching closer to normalcy, with the score rising about 7.4 points in a positive direction over the last two weeks. This was the highest compared to peers like Pakistan (+0.2) and China (-4.1).

However, India’s return to pre-pandemic per capita GDP will be attained post the 4th quarter of 2021. As for the OECD countries, the road to gaining back pre-Covid employment is a good 3-4 years away, laced with inequalities and social divisions, which are likely to hurt the women and young population the most.

The deep divide of availability of employment opportunities in India is in keeping with the global imbalance, where employment continues to grow in sectors like technology and finance while landing a solid blow to those in the hospitality and service sector businesses. As per a Naukri JobSpeak report, hiring in IT services grew 5 percent month-on-month in June, rising from 2,047 in May to almost 2,300 in June 2021.
However, the recovery is weak, to say the least, if CMIE (Center for Monitoring Indian Economic) reports are to be believed. Per their estimates, there has been a marginal drop of 2.7 percent in the unemployment rate of June 2021 (9.2 percent)from last month (11.9 percent) and an equally smaller increase in absolute employment figures of about 7.8 million, from 375 million in May 2021 to around 383 million in June 2021.

Youth affected the most
Tamanna Sharma (name changed), who graduated with her Masters's degree this year, recounts how she was unable to earn, despite having been hired by a firm, which subsequently shut down due to budget constraints.

“Post COVID, finding a job as per desire as well as qualification has become difficult. There is a sense of anxiety amongst millennials about the future. Other than right jobs, the young population is certainly looking for a positive disruption on the job market to settle down as soon as possible,” she said.

All of this comes against the backdrop of a desolate employment landscape for the young. Economic crises have traditionally been the worst enemy of the new employment generation, suggests OECD data, given that it took almost 10 years for youth employment levels to return to normal, following the 2008 global recession. With Covid having exacerbated such crises globally, there seems to be no quick recovery in sight. And the rising share of NEET (Youth not in education, employment, or training) is a testimony to that. ILO (International Labour Organisation) data indicates that at around 30 percent, India has one of the highest numbers of youth aged 15-24 who fall in the NEET category.

“The scars could be felt for a long time for young people in terms of employment and wages,” said Stefano Scarpetta, who oversees employment, labour, and social affairs at OECD.