Job Losses: A Reality Check

The right to work involves just and fair condition of employment, and also, protection against unemployment. It also entails access to employment without discrimination and a supportive structure that aids access, including appropriate and free choice, skill building and vocational education. However, the economic survey 2008-09 and the union budget 2009-10 demonstrate how the burning issue of job losses – retrenchment, lay off, redundancy – in times of global financial crisis and economic slowdown, are perhaps the least understood of the economic, social and political concerns. There are clear evidences that the job losses have worsened in many sectors in the recent past, posing a threat to the overall inclusive growth prospects, and are a challenge to continue successful poverty reduction efforts. Job insecurity in the country is on the rise and an expected decline in growth and investment is likely to exacerbate this problem. It is critically important to recognize the issue, and build a political will to tame anti-labour atmosphere and practices. Supportive structures should come with innovative policies and programmes.

Economic Survey 2008-09 admits that ‘While comprehensive employment data for current financial year is not available, some sample surveys have indicated employment losses in the wake of the global financial crisis and economic slowdown’. According to a sample survey of 2581 units conducted by the Labour Bureau, Ministry of Labour and Employment, during October-December 2008, there was decrease in employment of about half a million workers during the period. Another thin sample survey conducted to assess the employment situation in January 2009 over December 2008 indicated a loss of about 100,000 jobs in the month of January 2009. A sample survey conducted by the Department of Commerce for 402 exporting units revealed job loss (direct and indirect) to the tune of 109,513 persons during August 2008 to mid-January 2009. Two other surveys for the period August 2008 to 9 February 2009, and August 2008 to 28 February 2009 revealed job losses (direct and indirect) of 117,602 and 119,159 persons respectively. The survey conducted by the Labour Bureau for the period January to March 2009 covering 3,192 units indicated improvement in certain selected sectors, with employment rising by a quarter million. However, in sectors like leather, metal, transport, the decline in employment is continuing and the contract workers, in all sectors, are the worst affected in loss of income or employment. Seeing the status of these contract workers, the fate of workers in the informal sector, who are neither protected nor surveyed, can be easily understood.

Other than micro sample surveys, there are several macro reports and projections about the job losses in India, in present and future. ILO Regional Office for Asia and the Pacific in its report ‘The fallout in Asia: Assessing labour market impacts and national policy responses to the global financial crisis’ (February 2009), notes that Indian workers in sectors with high exposure to the global market such as civil aviation, textiles, leather, gems, and jewellery, which employ millions of women workers, have already faced serious job cuts. UNCTAD’s draft report ‘Impact of Global slowdown on India’s Export and Employment’ (May 2009) shows that in sectors such as textiles, gems and jewellery, ores and minerals etc, the total job loss in India was of around 1.16 million in 2008-09. The total job loss is estimated to be around 1.3 million in 2009-10.

The net employment is sum total of jobs created and lost in different sectors overtime. Promises of new jobs and employment, skill building and training bring avenues to the working populations. However, the programmes proposed in the budget 2009-10 are on a beaten track and do not hold much hope for the future. Take, for example, the Employment Exchanges that are now promised to be upgraded, to counter job losses and facilitate new employments. There are a total of 965 employment exchanges in India. Since 2000, ninety-one new employment exchanges have been setup. However, no big improvement in terms of reduction in the number of applicants on the Live Register has been recorded; in fact the number increased by 138,000 in this period. The percentage of placements on the vacancies notified in the Exchanges registered a big drop from 66.21 per cent in 2001-02 to 50 per cent in 2006-07, even as the number of registrations on the employment exchanges grew substantially. An Assocham (The Associated Chambers of Commerce and Industry of India) Study titled ‘Relevance of Employment Exchanges in the New Millennium’ (March 2009) has revealed that out of 37 employment exchanges in Bihar, total placements were found to be only 4 per exchange. Assam had an average of miniscule 7 placements per exchange out of its 52 exchanges. Among others, UP provided 37 placements per exchange from its 90 exchanges, AP managed to provide 42 job placements per exchange out of its 31 exchanges and Karnataka providing 45 placements per exchange from a total of 37 exchanges in a year. In the National Capital Territory of Delhi, for financial year 2006, the Department of Manpower and Employment had the budget estimate of plan and non-plan expenditure totaling Rs 57 lakhs, which could be translated into only 70 placements in 2005. Given this track record, without an active overhaul of the employment exchanges, what can we hope to achieve by computerization and on-line registration facilities, as noted in the union budget?

Another noble area, proposed in the budget, is skill development, where till now it is difficult to understand any coordinated action and programme in terms of catering to the needs of millions of new or redundant workers. We have a set of bodies created in the name of skill development. There is the PM’s National Council on Skill Development, which has set a target of creating 500 million skilled persons by 2022. We have National Skill Development Coordination Board, which is entrusted with the coordination and harmonization of the Governments’ initiatives for skill development spread across the seventeen Central Ministries and State Governments. A National Skill Development Corporation (NSDC), a non-profit Company, has been set up under the Ministry of Finance. There are different sub-committees of the National Skill Development Coordination Board. There are suggestions to create state-level structures as well. There is another National Council for Vocational Training. Amidst all this, the current capacity for skill development in the country is a mere 3.1 million and seeing the fate of the retrenched or laid off workers, surely this is not reaching them at least.

After the 42nd Indian Labour Conference’s (New Delhi, 20-21 February 2009) discussion on the global financial crisis and its effects, viz., large scale downsizing, layoffs, wage cuts and job losses, Ministry of Labour and Employment re-constituted Industrial Tripartite Committees (in December 2008), one each for cotton, textile, jute, road transport, electricity generation and distribution, engineering, sugar and plantation industries. They were required to act on the job losses. These are non-statutory committees, with the objective to provide a forum for dialogue on the problems that enterprises and workers face in particular industries, and to explore possible solutions. However, nothing emerged out of them.

Thus, other than the promises of creating new employments in future, there has been nothing concrete and visible either to stop the job losses or to rehabilitate the unemployed workers. No calls for employment generation will be complete and credible enough unless they are accompanied by calls for the reform of employment loss. Employment creation, in other words, cannot be separated from employment loss. Further, the employment and unemployment data in India is provided by the National Sample Survey Organization (NSSO). The latest available data is for the year 2004-05. There have been demands from various quarters, including from the Ministry of Labour and Employment for the unemployment data at more frequent intervals. The need for reliable and regular unemployment statistics has become more urgent in the present context of global recession and job losses.

2 thoughts on “Job Losses: A Reality Check”

  1. Why is this not highlighted in the media? andi mean specifically the job losses in corporate sectors. The only paper i see do it time and again is the hindu. here is a budget day analysis for one

    there has been a documenting of hundreds in hindu reports tht can be collated why is it that the rest of the media is keeping away from this kind of dissection?

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