Over 120 million blue collar employees go unpaid as operational restrictions impact businesses

• The lockdown will impact the gig economy workers or the blue collar jobs the most as they go unpaid.
  
• According to an ET report, 120 million workers were not paid wages last month, thanks to the nationwide lockdown.
  
• Across domains, the Covid-19 crisis has impacted over half of the contractual staff in India.
  
• The experts in the sector are now seeking government measures to save contractual employees.

As business comes to a grinding halt during lockdown, millions of jobs are now at risk. In fact, the unemployment rate in India is inching up. For the week ending April 26, it came in at 21.1%, according to data by the Centre for Monitoring Indian Economy (CMIE).

However, the worst of all are gig economy workers who have a job whose earnings depend on ‘how much’ they work. They are clocking in zero earnings. In a country as vast as India, it accounted to 120 million workers who went unpaid last month. As per an ET report, India has nearly 170 million people employed in blue-collar jobs — including drivers, logistics, delivery and other contractual staff.

A large chunk of such workers also lost their jobs ‘on paper’ too leaving them with a bleak future even after the lockdown ends. “The slowdown started around mid-March and only around 20-30 million people now have their employment intact,” Pravin Agarwala, cofounder of Betterplace, a blue-collar employee management firm, told ET.

More downsizing on the way

Companies are also expected to downsize the staff further in the coming quarters as the Coronavirus infection shows no signs of dying down. However, the industry might pace up if the demand surges during the festive season.

On the other hand, this will also impact those employed without a legal contract such as casual labourers — who do not have a fixed take home salary. Over five million Indians have contract jobs which are less than a year in tenure. A recent survey by the job search platform Indeed also said that half of the Indian businesses already trimmed the contractual workforce and freelancers - to cut operational costs.

The cost of unemployment

Half of India’s contractual staff is in deep trouble. Startups like Swiggy, Udaan, Oyo, Meesho and others have laid off their contractual staff or sent them on unpaid leaves to keep up with the running costs. Even the incomes have declined by massive 60%.

The experts in the sector are now seeking government measures to save contractual employees.

"Aggregator models like Ola, Uber, Swiggy need to start social security measures in their respective companies. While it is difficult to protect their entire earnings, but there has to be some sustenance amount, at least of ₹5,000 per month, that is going into their bank account, otherwise, it is like a 'use and throw' model," Jayant Krishna, Executive Director for Public Policy at Wadhwani Foundation told Business Today.

This rising unemployment might have social implications as well, say experts.

“Our large and growing youth population will be further disenfranchised, potentially spurring social discord, crime, and instability," Sabina Dewan, the president and executive director of the think-tank JustJobs Network told Mint.

See also:
OYO sends US staff on ‘temporary leave’ but Indian jobs are safe

Don’t layoff during lockdown— India needs a ‘jobs protection programme’ like US and the billionaires must lead while the government helps

Over 136 million jobs are at risk due to Corona lockdown — Here are the worst-hit sectors