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| Impact of Covid-19 on Employment: A Case of Automobile Industry | |||||||
| Paper Id :
16817 Submission Date :
2022-09-15 Acceptance Date :
2022-11-23 Publication Date :
2022-11-25
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| Abstract |
The Covid-19 pandemic has triggered the employment opportunities worldwide after great depression and widens the poverty gap and inequality. It is estimated that four out of five, about 81 per cent of the 3.3 billion people worldwide, are affected by the partial or complete closure of their workplaces (ILO Report, 2020). So, present study is an effort to examine the impact of COVID -19 pandemic on automobile industry (informal sector) in Faridabad city for the period of 2019-2022. A total of 200 respondents are interviewed on non-probability sampling due to pandemic restriction on telephone and face to pace basis. The results of the study show that there is significant change in employment opportunities, wages, earning and especially working hours. Respondents reported that they get almost half salary and wages due to slowdown in business for a long span. 35 per cent respondents reported that they did work from home almost one year with low earning and more working hours with internet issues, inconvenient environment for business at home. So, study recommended that there is strong need to protect the informal workforce in terms of wages security, safe and healthy work environment and revival of job opportunities programme due to badly hit of pandemic by centre and state government.
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| Keywords | Employment, Covid-19 Pandemic, Informal Sector, Wages, Automobile Industry, Haryana. | ||||||
| Introduction |
The COVID-19 pandemic has been lambed the global labor market and governments around the world. A report by the International Labor Organization (ILO) estimates that more than 2.5 crore jobs have been threatened worldwide as a result of the spread of the novel corona virus (ILO Report, 2021). It is estimated that four out of five, about 81 per cent of the 3.3 billion people worldwide, are affected by the partial or complete closure of their workplaces (ILO Report, 2020). The United Kingdom, the United States, Canada, and various European and Asian countries have reported significant job losses, increasing their unemployment rate. The nature of employment is multilateral. It helps us to analyse the contribution made by different industries and sectors towards national income. The information relating to employment in the formal sector is collected by the Union Ministry of Labour through employment exchanges located in different parts of the country (National Council of Educational Research and Training).The number of workers; all those who are engaged in economic activities are included as employed. The worker-population ratio is an indicator that is used for analysing the employment situation in the country. This ratio is useful in knowing the proportion of the population that is actively contributing to the production of goods and services of a country.
The global economy is set to expand 5.6 per cent in 2021- its strongest post-recession pace in 80 years(Global Economic Prospects, 2021).Only 57 per cent of people of working age population were employed which includes the 2 billion population in informal and 1.3 billon population in formal sector till June 2020.Many businesses, particularly micro and small enterprises, have already gone bankrupt or are facing a highly uncertain future, with negative consequences for their future productivity and their ability to retain workers. According to an ILO (International Labour Organization) survey, in 2021 of 4,520 businesses in 45 countries worldwide undertaken in the second quarter of 2020, 80 per cent of micro-enterprises and 70 per cent of small firms were facing significant financial difficulties. Globally in 2020, job losses among wage and salaried employees were estimated to be twice as large as losses among the self-employed, causing a shift in the employment structure (GWR, 2020-21) The total working hour losses refer to a sharp drop in labor income and an increase in poverty(ILO Flagship Report, 2021).
Labour in India refers to employment in the economy of India. In 2020, there were around 501 million workers in India, the second largest after China. The Employment Rate in India increased to 42.40 per cent in the fourth quarter of 2020 from 40.90 per cent in the third quarter of 2020, according to MoSPI (Ministry of Statistics and Programme Implementation). In India, any person who works about eight hours a day for 273 days each year is considered to be working in the normal human year. Therefore, a person to be named as an employee must find a meaningful job of at least 2184 hours a year. A person, who does not get a job at this time, is known as an unemployed person.
The second wave of Covid-19 has had a negative impact on wages and households as local vacancies are closed in many provinces. The impact of these local restrictions has been felt by people working in the informal sector, according to new data released by the Centre for Monitoring Indian Economy (CMIE, 2021). The principles of Indian employment are silent on work from a domestic perspective. There is flexibility available with employers allowing or not allowing their employee to work from home and clarifying their guidelines accordingly. Due to the nature of COVID-19 and the promotion of social distancing various national governments and central governments occasionally issue various recommendations to promote work from home. It can be shown that an infection with COVID-19 was contracted at the time of employment and arising out of work, the employer will be legally obliged to pay compensation to the affected employees. The obligation to pay compensation also depends on other factors such as the state of employment, the type of employee's employment, and the circumstances in which the injury / death / infection was caused. Accordingly, each case must be evaluated based on the facts of each case. In, this backdrop, present study is an endeavour to examine the impact of covid-19 on employment in automobile industry of Faridabad district (urban).
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| Objective of study | The main objectives of the study is to examine the impact of COVID-19 on Retail sector in Faridabad district (Urban area) Haryana. Following are the sub-objective;
1. To examine the general and business profile of employee and employment.
2. To make a comparative analysis of wage differential, working hours before and after pandemic.
3. To provide some suggestions for further policy implications. |
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| Review of Literature | A literature review is a type of academic writing that
provides an overview of existing knowledge in a particular field of research. A
good literature review summarises, analyses, evaluates and synthesises the
relevant literature within a particular field of research. The present chapter
reviews existing relevant literature related with the study. So, present review
provides the insight on nature, structure and challenges of unemployment and
study being related to impact of COVID-19 on employment. A) Study
being related to nature, structure and challenges of unemployment Bhattacharya
and Mitra (1993) zeroed in on the
employment structure in the modern area during the 1980s and found that the
level of work in the assembling area to the complete work has essentially
diminished. Dev (2000) contended that progression would
genuinely disintegrate employment development in South Asia, basically at a
gross level. Goldar (2000) pointed toward understanding the
employment status in the coordinated assembling area in India until the 1990s.
The relapse examination recommends that there has been a steady development of
little and medium undertakings because of the adjustment of the size,
construction, and development of work while the genuine wages have
declined. Bhalla and Hazell (2003) examined a portion of the
ramifications of various situations for expanding employment and taking out
neediness throughout the following twenty years. Study shows that India
deals with a genuine issue in producing sufficient work in the years ahead to
stay up with the development in the workforce. Ghose (2004) concentrated
on the idea of the employment issue that India is at present facing utilizing
the latest NSSO overview information from 1999-2000 and 2001 populace
registration and a few different sources. It was uncovered that the fundamental
purpose for the employment issue in India is that the majority of the
functioning populace is poor. Kapsos (2005) examined the
employment-related monetary markers, especially those that action the capacity
of economies to create adequate employment and open doors for their populaces,
frequently giving significant experiences into economies' generally
macroeconomic exhibition. Ramaswamy (2007) assessed different
parts of local employment development during 1983-to 2004-05 in India. The
creator appraises the development and construction of work in the 14
significant states, as the examination of business development is essentially
based on the 38th cycle (1983) to 61st cycle (2004-05). Unni and
Raveendran (2007) introduced the employment development from the 50th
cycle 1993-94 to 61st cycle 2004-05. Information considered in this study was
taken from the work joblessness review (61st cycle 2004-05). The most recent
twenty years were inspected as a general decrease in business. Dev and
Venkatanarayana (2011) researched the employment and joblessness
circumstances in India among all the age bunches for three and a half ten years
27th cycle (1972-73) to (2007-08) and youth for more than multi-decade, i.e.,
from 1983 to 2007-08. The principal objective of this paper is to analyze the
attributes of the adolescent populace, particularly the size of the young and
their human resources development, investigation of the youth work market,
examination of the compensation pace of the youth work market, and the effect
of monetary development on work market, particularly of the young work
market. Bairagya (2012) discussed various goals and first
decided to investigate open doors for the advancement of the casual area
regarding employment age by estimating the patterns and examples and by
assessing the determinants of casual area work in India. Pattanaik and
Nayak (2013) examined the patterns of employment power of development
in India at the total level and across areas, for the time 1961-62. Mehrotra
et al (2014) showed the employment patterns in India for the time of
1993-2012 and found that there has been a change from horticulture to the
assembling area with a flat out fall in farming business which has further
developed schooling, diminished youngster work, the motorization of farming and
increment the expectation for everyday comforts in country regions due to the
development in genuine wages. Pattanaik and Nayak (2014) recognized
the macroeconomic determinants of employment development power in India. Waqif
and Reddy (2015) summed up the various sorts of positions accessible
for new alumni into general classifications and investigates arising employment
potential open doors in India in unambiguous chosen public area units and the
economy overall. Anderson (2016) inspected the gendered idea of
development employment nexus by breaking down the differential effects that
macroeconomic strategies and designs have on development's business power by
orientation for 80 nations from 1990-2012. Tripathi (2016) attempted
to explore the applicable family level determinants of employment and
joblessness circumstances in India with unique reference to the North-East
territories of India. Behera (2019) recommended that the scale
and extent of modern employment be viewed as the way of an economy's change.Elhorst
(2003) found a direct relationship between the level of
educational attainment and employability, explored four impacts education has
on individuals’ employment pattern/employability. Investment not only generates
incomes for the people but also increases productive capacity in an
economy (Domar, 1946). Positive investment shocks lead to
increase in employment rates (Yildırım and Yildırım, 2017). Unemployment
rates are positively associated with a decline in fertility rate in European
countries. (Jimeno & Rodriguez-Palenzuela 2002). Population
Growth is the main problems of Unemployment in Jammu & Kashmir. (Gupta,
1990). Sackey and Osei (2006) found that technical and vocational
training significantly decreases the probable chances of an individual becoming
unemployed. Younger people are more likely to be unemployed due to the fact
that they possess lower skills in comparison to their older counterparts. Both
public and private investment is of immense importance as far as the economic
growth of a country is concerned. The required conditions for the take-off
stage, advocated for both domestic and foreign investments with the belief that
it accelerates economic activities. So, the inflow of FDI has also been seen as
one of the factors that foster economic growth (Uwaizie, Igwernma,
& Eza, 2015). B)
Studies being related to Impact of Covid-19 on Informal Sector
Liepmann and Pignatti (2021) had explored
the welfare effects of unemployment benefits when informality was high. The
result of the study was that the effects of UBs were positive and comparatively
large in a context with high informality and that accounting for the nature of
informal jobs was decisive to explaining this finding. . The study
of Kaur and Shubham (2021) had revealed the reverse
migration during Covid-19 crisis. The research analysed that most
of these reverse migrants had been engaged in the informal sector without
access to social protection and little money for food or housing. The study
concluded that greater emphasis needs to be given on outcome-based skill intervention
by undertaking skill activities in emerging areas and should also include soft
skills and digital literacy. Kumar
and Srivastava (2021) had
examined the impact of COVID-19 on employment in urban areas. The study stated
that central and state governments have taken various measures such as
increasing spending on infrastructure creation and enabling access to cheaper
lending for businesses, to sustain economic activity and boost employment
generation.). Similarly, a study by Chung et
al. (2020) had examined the working from the home during COVID-19
lockdown. The study shows that individual employees’ predominantly positive
experiences of home working during this period have influenced their attitudes
and preferences towards flexible working and the division of housework/care for
the future. Skills provided by the ILO employment programs had a positive
impact. There were three channels linking participation in the employment
program to reduction in violence played a role in Somalia, the economic opportunity,
contact and grievances Borino and Sage (2019). Economic crises, gap between the curriculum and industry
requirement and increasing labour force are the main cause of unemployment in
Haryana. Government need to work with the social groups as well to
aware the youth about various skill related programs running by government
agencies and various NGOs and create a working and prosperous state (Dahiya,
2019). A research of Nyczak and Viegelahn (2018) had
examined the wages in exporting and importing firms of the manufacturing sector
in Africa. The results of the paper shows that the comparative advantage of
firms in export markets was mainly based on low costs than on quality, and
where firms import predominantly out of necessity than out of choice. The study
also shows that there was no significant gender wage gap within trading firms
in the sample. |
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| Main Text |
Profile of Haryana The State of Haryana is surrounded by Himachal Pradesh in the North, Uttar Pradesh in the East, Punjab in the West and Rajasthan in the South. Near the National Capital, Delhi, the State surrounds it from three sides. It is spread over an area of 44,212 sq. Km. Km with an area covering 1.3 percent of the country. Haryana nationally is a small state, State’s contribution to National Gross Domestic Product at continuous rates (2011-12) is estimated at 3.8 percent according to the Urgent 2019-2011. The spread of the Covid-19 virus was a major challenge for the global economy and for the Indian economy. Haryana's economy has also been hit hard by the Covid-19 pandemic. According to Advance Estimates for the year 2020-21, the Government's GSDP at current rates is estimated at7,64,872.41 crore, recording a negative 2.0 per cent growth in 2020-21 due to Covid-19 compared to a growth rate of 10.7 per cent reached 2019-20. Industrial Budget decreased to 30.2 per cent and Targeted Sector Budget is set at 50.9 per cent in 2020-21.The spread of the Covid-19 virus was the biggest economic challenge in the world over the past hundred years. The GSDP (Gross State Domestic Product) of the state is also estimated to be at 5.7 per cent. As a result of the gradual opening, economic activity in Government and at the National level began to improve. Rapid V-shaped recovery is considered in the State economic activities of 2021-22. The State Government intends to introduce Haryana Enterprises & Employment Policy-2020 (HEEP-2020) to address the issue of State growth. The aim of the policy is to attract investment of 1 lakh crore and to create 5 lakh jobs in Government. The main objectives of the Prime Minister's Employment Generation Programme are to provide Micro, Small, and Medium Enterprises (MSME) business start-up opportunities.  The Faridabad region is about 25 kilometres from Delhi. It is bound by the Union Territory of Delhi (National Capital) to the north, Palwal District to the south, Gurgaon District to the west. River Yamuna divides the Boundary District to the east and the UP state. Delhi-Agra National Highway No. 2 passes through the centre of the region. In Faridabad major exportable items are auto parts, shoes, and tractor. Bata India Ltd., Eicher Tractor Ltd., Escorts, JCB Ltd., Goodyear India Ltd., Whirlpool India Ltd., Escorts Ltd. Etc are some names of industries in Faridabad. Relevance of the Study Prior to the COVID-19 crisis, the Indian economy had entered a period of slow growth. According to the IMF, during the period 2015-2019 growth has dropped from 8.0 to 4.0 percent. In 2018, the unemployment rate exceeded 6 percent, while from 2012 to 2018.The COVID-19 crisis hit an Indian economy that was already slowing. The Government of India instituted a 21-day lockdown on 24 March 2020. This was one of the world’s strictest, halting many economic activities, storing basic services and keeping only open stores supplying the necessary consumer goods. The shock to jobs is severe, and the worst at the lower ends of the employment structure where it will affect large numbers of people. This will be reflected in worsening employment quality, and rising rates of unemployment and underemployment, more people out of the labour force, and increased poverty.The important thing beyond these standards pre-existing immigrant workers the backbone of the Indian economy and is now one of them which strikes the most. India faces a long-term labor market challenge, including slower and more volatile changes. Between March and April 2020, the IHS Market Purchasing Managers ’Index showing the latest impact of the pandemic, dropped from 52 to 27, the most severe decline and the lowest reading rate since the start of data collection. At the same time the IHS Market India Services Business Activity Index dropped from 49 to 5, also the lowest-ever level.The Indian economy is dominated by small and mostly informal businesses where about one-third of employees in businesses that employ less than 10 people in the informal sector. In this backdrop, present analysis is an effort to examine the impact of COVID-19 on retail sector in Faridabad district (Urban area) Haryana.
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| Methodology | To achieve the above objectives the study is based on cross section primary data for the period 2019-2022 in the Faridabad district (urban) Haryana. A well-structured questionnaire, information related to personal and business profile about employees, employer and questions about impact of the COVID-19 on wages, salary and working hours has been asked. A pilot survey has been conducted on 50 respondents before final interviewed of respondents. Primary data has to be collected in the month of January 2022 through survey schedule and personal direct interview in which telephone services are used at most , whereas possible, due to the COVID-19 pandemic restrictions. Non probability sampling (Convenience sampling) is used for gathering sampling unit from universe due to pandemic. The ratio, percentage techniques are used for analysis. |
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| Result and Discussion |
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| Conclusion |
There is no doubt that Indian economy has entered a period of slow growth prior to pandemic. According to the IMF, during the period 2015-2019, Indian economy’s growth rate has dropped from 8.0 to 4.0 percent. In 2018, the unemployment rate exceeded 6 percent, while from 2012 .The COVID-19 crisis hit an economy that was already slowing. So, present study is an endeavour to examine the impact of Covid-19 on employment in informal sector (automobile industry various outlet and workshop in Faridabad District (Urban) for the period 2019- 2022. The major findings of the study reveal that there is significant change in employment opportunities, wages, turnover of a business and especially working hours. Respondents reported that they get almost half salary and wages due to slowdown in business for a long span. 35 per cent respondents reported that they did work from home with low earning and more working hours with internet issues, inconvenient environment for business at home. According to International Labour Organisation 60 per cent of population engaged in informal sector especially in emerging and developing economies and for Indian economy almost 90 per cent workforce involved in informal sector of country. So, there is strong need to protect the informal workforce in terms of wages security, safe and healthy work environment and revival of job opportunities programme due to badly hit of pandemic by centre and state government. Study also proposed that there is ample scope of research in this area with the inclusion of more variables with large sample size and probability sampling. |
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| Limitation of the Study | Major limitation of work is that only urban area of Faridabad District has been undertaken for universe of study. With this due to Covid- 19 pandemic non probability sampling is used as a selection of sampling unit for current analysis. | ||||||
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