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The State of Earnings in India: The Crisis of Inequality amidst the Covid-19 Pandemic

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Arjun Kumar, Ritika Gupta, Sunidhi Agarwal, Anshula Mehta, Swati Solanki, Mahima Kapoor

The COVID-19 pandemic has had a devastating impact on the existing disparities in earnings of the various stakeholders of the economy. To address the same and pave the way for solutions, the Center for Work and Welfare (CWW) at IMPRI Impact and Policy Research Institute, New Delhi, and Counterview organized a #WebPolicyTalk on The State of Earnings in India: The Crisis of Inequality amidst the Covid-19 Pandemic as part of the series The State of Employment and Livelihood – #EmploymentDebate Topic.

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Socio-Economic Background

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Dr. Anjana Thampi, Assistant Professor, Jindal Global Law School, Sonepat began with the introduction of the current economic situation of the emerging markets and the global economies. The experts have called the current state of the country’s economy the worst downward spiral. The workforce of India being an extensively heterogeneous lot, the majority of the salaried or the daily wage segment earn less than the median income that is 10,000.

Caste and gender also play a pivotal role in demonstrating the earning of an individual. A considerable section of women who are a part of the workforce and work in their family fields are not paid and thus, do not participate in the decision-making process. In addition to this, the female segment in the workforce is minimal. That is 18-19% and has been declining significantly since the 1980s.

Workers from the disadvantaged castes are also more prevalent in the jobs that pay less and where they can be replaced by automation but are not. The years leading up to the pandemic have shown sinking in wages. The workers at the bottom have been the worst hit since they already had very little savings.

Disproportionate Impact of the Pandemic

During the lockdown, unemployment peaked. Delayed payment of wages and nonwage has also been registered at a large scale. Issues like food and nutritional security also surfaced majorly due to the absence of income sources for many. Keeping in mind the status of economic inequality, 2020 was a good year for the wealthiest people of the country. The combined net worth of these billionaires increased by a staggering 35%. While 1.7 lakh people lost their jobs every hour in April 2020, according to Oxfam.

Economic inequalities get combined with the stark disparities in access to essentials. About 905 million people did not have access to piped water, and  287 million did not have access to toilets. One-fourth of the population lived in single-room dwellings, while 5% of the population lived in dwellings with more than 5 rooms. Disparities in access to online education and economic distress can increase the number of dropouts and worsen access to employment opportunities.

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A Gendered Perspective

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Dr. Priyanka Chatterjee, Assistant Professor, Department of Economics and International Business, School of Business Studies, Sharda University established that the status of employment in India was already not in good shape prior to the pandemic. Access to paid work was also discussed under the gender lens. Since the majority of unpaid work is undertaken by women, it makes them as vulnerable as the unemployed.

The surveys conducted to study the status of employment have all stated that the ratio of unemployed women working at home has increased considerably in the pandemic. The workforce had been hit devastatingly in the first wave of the pandemic than the rural. The construction and manufacturing sector being hit the worst in the pandemic, the recovery has not been as well as it had been anticipated, since the third wave has hit the rural areas also, along with the urban. Unemployment from the construction sector has been the highest, along with the manufacturing sector, with the service sector accounting for the least unemployed.

Sectoral Disparities

According to the report by CMIE, 13.3 million people lost jobs in the construction sector, 8 million in the manufacturing sector, and contrastingly 20 million in the service sector that has a sizeably small share in the labor market. The reason for this situation in the service sector is the nature of unorganized services.

The construction industry being shut from the day of the commencement of the lockdown has led to the unemployed men and women from the industry shifting to independent work. But statistics have shown that self-earners are equally economically vulnerable, if not more. Women in the independent sector earn as much as one-third of the men’s pay and are unable to access basic infrastructure to run and hold small-scale businesses.

Question and Answer

A few questions were raised by Dr. Simi Mehta, regarding the gender roles and how and when can we expect a paradigm shift in the areas of divided unequal income. Questions were put by Swati who is a Researcher at IMPRI, regarding the support the minimum wages are able to provide.

In response to these questions, Dr. Anjana said that the acknowledgment and active concern that these issues have been and are receiving is a move towards change. As compared to the previous times when these issues were not a part of the public dialogue. In addition, to accelerate the process towards more equitable income and access, better policy frameworks need to be implemented. Concerns regarding the working status of the ASHA workers and their honorarium were also discussed. The need to institutionalize the credit facilities by the banks was also mentioned. 

The session then came to a closing with a vote of thanks offered by Dr. Simi Mehta, who is the CEO and Chief Editor at IMPRI.

Acknowledgment: Ramya Kathal is a Research Intern at IMPRI

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