The ‘lockdown’ generation of India stares at acute unemployment

The virus may not be discriminatory in who it strikes, but its social and economic consequences are discriminatory. The well-heeled have no worries. For the rest, it is an every-day struggle

Photo courtesy- social media
Photo courtesy- social media

V Venkateswara Rao

The multiple shocks facing young people from the Coronavirus pandemic could result in them being scarred throughout their working lives, creating a “lockdown generation,” the United Nations’ labour agency has warned.

“There are two economies in the pandemic,” says John Gerzema, CEO of The Harris Poll of USA. “In general, older, wealthy Americans who are white are typically more confident that they’ll prosper. But the ones really feeling the pain are younger, lower income Americans and minorities.”

It is no different in India. There were already two economies in India even before the pandemic. The contrast between the two economies is more pronounced during the pandemic. The virus may not be discriminatory in who it strikes, but its social and economic consequences are discriminatory. The well-heeled have no worries about their finances or the future. For the rest, it is an every-day struggle.

Today’s youth face a persistent global underemployment challenge, where they are up to three times more likely to be jobless than elder adults, as per a story published by the Atlantic Council. One of India's biggest economic problems is unemployment, particularly for the youth. Young people who have invested in higher education are already finding it increasingly hard to find work. India's unemployment rate rose to 6.1% in the 2017-18 fiscal year, the highest level in 45 years. The pandemic has made the issue all the more acute.

Globally, young workers tend to occupy low-skilled, entry-level positions. Young people are overrepresented in sectors like retail, hospitality and tourism, which have been badly hit due to the lockdowns and social distancing norms, according to the Atlantic Council think-tank. The Coronavirus crisis is going to lead to massive job losses, furloughs and young people are likely to bear the brunt.

In May, the International Labour Organization (ILO) warned that COVID-19's economic fallout could "leave many young people behind", permanently excluding them from the job market. The virus's legacy could be with us "for decades", it said. The ILO also says the world's "youth are being disproportionately affected by the pandemic". In its latest report, ILO estimates that more than one in six young people - roughly 17 per cent - have lost their jobs since the pandemic began. In India, the proportion of young workers affected by the crisis appears to be even higher. About 41 per cent of people aged between 15-29 were out of work in May, according to data compiled by the Centre for Monitoring the Indian Economy (CMIE).

When big convulsive economic events like COVID-19 happen, the implications tend to take years to play out. "The long-term impact of the pandemic will be very severe and take a long time to fix," Mahesh Vyas, the chief executive officer of the CMIE told Al Jazeera. "Young people will not be able to save for the future and that affects the next generation too". "If the young generation is not given jobs, then the demographic dividend will become a demographic demon" says Vyas.

India has not announced any specific measures for out-of-work youth, like unemployment benefits that exist in USA. However, it has injected $5.3 billion into its rural employment scheme MGNREGA as part of COVID-19 stimulus package, in the hope that this will provide incomes for the millions of jobless workers who have left cities to their villages. But educated unemployed youth may not opt for the government's rural employment scheme, leaving them in the cold.

So, what, if anything, can be done to secure the future of youth? Today, 28 per cent youths in India belong to the age group of 15-29 years, but half of them have less than secondary education or are illiterate, while only 13 per cent are graduates. Also, most of the youth who are educated have poor employable skills. Policy interventions are needed to improve the odds for the young generation - i.e., skills training, vocational training initiatives, public works, start-up entrepreneurial credit, wage subsidies, unemployment benefits etc. Another necessary policy intervention needed is to pursue an expansionary fiscal policy with an emphasis on job creation. The pandemic also underscores the need for the universal basic income in order to provide a safety net for the vulnerable sections of the population.

(V Venkateswara Rao is a retired corporate professional and a freelance writer)

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