 Hello and let's talk about unemployment. Unemployment has been one of the big stories of the post-pandemic world and India has been one of the worst affected by the issue. India was already facing a massive unemployment crisis before the COVID-19 pandemic hit. With the lockdown, the crisis has become much worse. The unemployment rates surged to around 27% at the height of the pandemic-induced lockdown. Ever since the lockdown was relaxed, the situation has improved with many billions supposedly regaining employment. But it looks like the total numbers hide certain facts. What is the nature of this employment and how is it different from before? What implications does this have for the economy? We talk to journalist Anindya Chakravarti to find out. Anindya, thank you so much for joining us. So last week, we took a look at the idea that or the claim that there had been some kind of an economic recovery in July as opposed to, sorry, in June and what was happening in July after that. So this week, let's maybe take a deeper look at the employment scenario itself. Now, one of the key arguments that has been made is that the employment situation has improved. I mean, the lockdown was bad, everyone knows that, but now employment has picked up, more people have returned to their jobs. But the devil is really in the details. So has there actually been a substantial and meaningful rise in employment or is it just other factors covering it up? So Prashant, if you just look at the numbers, right? So in March before the lockdown, and I'm going to go by CMI's data because they do the weekly survey and then they collated every month and get a better picture. So let's just compare apples to apples. In March, there were about 39.6 crore people employed in India, which is 396 million people employed in India. And which itself is a bad number because it suggests that employment has actually been, has reduced over the years ever since CMI started collecting this data and not increased. And whereas, you know, population and the total number of people seeking jobs have gone up every year. Since then, right after that in April because of the lockdown, it fell to 275 million. So from 396 straight, it fell to 275 million. 121 million job opportunities went, which includes people who are being paid as daily wages, salaried people, people with businesses, people who are so called self-employed. And we know what that self-employed essentially means, right? It's someone who's selling tea on the corner or making momos at home and bringing it and selling it in the evening. And that's basically what self-employment means along with certain itinerant services, carpenters, you know, painters, then plumbers, electricians, those kind of people immediately lost their job opportunity, their work. And most of these, most of these, out of these 121 million people, about 91 million, were daily wages and self-small traders and self-employed people. So small trades, self-employed and daily wages, self-employed means very people who live on subsistence almost. It's not as if someone has a big business, right? So 91 out of 121 was that. When it comes to agriculture, Prashant, there was no change. So 117 million people were employed in agriculture in March. That's the number employed in April. The number actually increased in May, then went up even further in June to 130 million people. And then in July, there's been a small drop to 126. So if you compare to March to July, then about 9 million additional people have got work in agriculture. And you know what agriculture is, right? It's ultimately a space for disguised unemployment. So if you look at the 2016 report collected, collated, based on NSSO data that it says that there are about 52 million people in India who are disguised unemployed. What does disguised unemployment mean? It means that essentially there are three people in a family who can work and they have a piece of land which actually just requires the labor of two people. The third person also goes and works there. Has no additional productivity, has no additional income for the family, but they think they're employed. So this is essentially what is called disguised unemployment. It's unemployment looks like there is work. And ultimately what happens is that this pushes people out of agriculture. They move and do some other work, at least to augment some amount of income. Now we know most of these disguised unemployed people are actually in agriculture. Yes, there are, as I said, that there would be someone maybe has opened a small stall somewhere and he could be out there working 12 hours a day instead of that. He takes a break of three, four hours and the wife comes and sits there for three, four hours. So actually it is still one person working, but it looks like the two people are employed. So that also happens. Of course, but most of it is in agriculture. So even in March, when there were 117 million people employed in agriculture, there would have been a significant amount of disguised unemployment there. So the fact that in the sowing season, and there has been a good monsoon sowing season, you will see normally see people move back, but that starts from March itself from harvesting and then sowing and then they come back much later. Now, the fact that in sowing season, the numbers have gone up. Sometimes does happen because there's a little bit more need for employment at a micro family level. However, that number is not likely to be that 9 million. So I can say without any doubt that the reverse migration that we've seen, which the estimate suggests from 80 lakh to 1 crore or 9 to 10, 8 to 10 million people, large number of them have just gone back to their households with a small piece of land. And they're just going and working there, helping out. If the survey comes, they'll say that I am a farmer. But actually they are disguised unemployed. So the so-called rise in unemployment, which is taking place in agriculture, there's no doubt in my mind that at least half of that rise is not required. Some of it would be required because of sowing. So if there's been a rise of about 90 million jobs, you can take for guarantee that at least 40 to 50 million of them are not required. These are disguised unemployed people. Now let's take a look at what has happened to daily wages. As I told you, the daily wages who were I think approximately about 126 million people in March that dropped sharply, 91 million out of them lost their work. And now we see that a significant number of that have come back. So only 68 lakh or 6.8 million people are left in the daily wages and small trade category who do not have work. Does that mean that everyone has got back their work? Now the question is that if 8 to 10 million people per shant left our urban centers and went away, then one would assume that the shortfall in daily, the reduction in number of daily wages should be higher than that 7 odd million we're seeing. It should be higher, 6.8 million that we're seeing. But it isn't. Why? Because there's a story behind that. And that story is the most significant story in my mind other than the fact that a large number of daily wages have actually become disguised unemployed in agriculture. And that is the drop in salary jobs. And we know that salary jobs are the ones which are considered to be what people want because it's a secure job. Sometimes maybe at a cost of a slightly lower monthly income, but over a period of time, obviously a salaried person earns much more than a self employed person. This is data that we have government data which proves it. So the drop in salaried numbers is a huge issue here Prashant. So in this context, the government's understanding seems to have been that, you know, you let the cycle sort of continue, the jobs might, we haven't really seen a lot of focus on job creation even before the crisis. And especially after the crisis like we've discussed before it's largely been in terms of handouts, which have provided some temporary relief, but nothing out of structural or sustainable basis. So in this, in this way, do you see any kind of say comeback happening where the economy over time manages to sort of without help from the government is not coming, manages to correct itself or is it likely to become a spiraling crisis? Absolutely not. There's no chance of that happening. And we know that well before COVID-19 took place came here. We know that how this government and basically the Modi government, it's in its two of us has completely failed when it comes to giving jobs. People say if there were no jobs, how come it won the election? Because yes, as I've argued many times that the poorest of the poor are better off. India's record with jobs has always been very poor Prashant. I mean, even if you look at the UPA period, the job growth rate was less than 1% per annum, even at its best period. It was 0.7%, which is much lower than the number of people being added in the job space. So if you look at it, as we know that there are about 100 odd crore people in India who are above the age of 15 years who can work and out of which only about 40 crore have worked. So the 60 crore people who can work don't have work. Maybe half of them don't want to work. Maybe they want to be students, but another 30 crore you can easily say are people who would have wanted work, but have given up simply because there is no work. So this has been a continuous process. We've seen actually the record of employment growth has been much better in the 80s. And this is RBI's data. This is the RBI data, not some arbitrary private data which is being used by maybe people who want to oppose liberalization. Now the point is the 80s, the record was much better since the 90s. The record has been poor for every government. The Modi government's record has been even worse. So the question now is, let me just quickly point again to the salary numbers. The interesting thing is that the drop in salary employees had, you know, there are only about 21%. So it's about, I think, 86 odd million people even in 2019-20 who out of the 400 odd million people who had work, had salary jobs, regular salary jobs. That dropped sharply. That went down to about 68.4 million in April when the lockdown took place. Then it went up, it went up to 72.2 million, but in July, between June and July, 5 million people have lost their jobs in that space. 5 million people have lost salary jobs. It's gone below the beginning of the lockdown. So you can say, yes, it'll take time to pick up again as the lockdown is slowly opening. But no, when the lockdown is slowly opened, more people who have lost salary jobs, which tells you that as businesses open, as they become more and more uncertain about the future, they're just cutting back on jobs. They're simply reducing the number of people they're hiring because that is very clear from the data that is coming out of CMI and the data analyzed by CMI, even sectoral data analyzed by CMI, where it shows that in textiles and most manufacturing salary jobs have gone down, the wage bill has gone down. It's only in finance and telecom, where the wage bill has gone up, banking, finance, because we know that stock markets have gone down. Banks are doing relatively better because of the kind of liquidity around, and telecom is obviously doing better because people are stuck in their home. Everywhere else, the wage bill has reduced, which means that people are being shunted out of their jobs or their pay is being cut. What does that mean? That essentially means that demand, overall demand, which you've seen has been constrained for the last 10 years at least in this country, or at least nine years, since the time when the UPA government, UPA2, decided to reduce its fiscal deficit and cut back on spending. Since then, we know that demand in the economy has been constrained, which has not been growing. It has shrunk in the last one odd year. It has shrunk dramatically, even for the buying classes, for the middle classes we call it. And if salary jobs go down, and if pay goes down in salaried space, then we can be absolutely certain that the demand is going to contract even further. And when that happens, what does that mean? That means that businesses, whether they're small, big, whatever, itinerant service providers, anything and everything, restaurants, travel, everything, that is going to be hit. The demand is going to be hit. The profit margins are going to be hit. The earnings are going to be hit. And when that happens, that includes media, of course. And when that happens, obviously they're going to cut even more jobs, reduce salaries even further. So this is a vicious cycle for which this government or neoliberal policies that this government has been consistently following has no answer. And this is a very strange thing because all neoliberal commentators claim that this is a socialist government. Why do they say it's a socialist government? Because it's a bit of a handout government. It does have a lot of these schemes that it pushes out. It is spending at the bottom most layer just to keep people above the subsistence level, to keep their nose above the water. That's all that this government does. So it's a combination of keeping the poor just above that level so that they can survive and neoliberal policies. And unfortunately, these are government rules, neoliberal policies are even more skewed towards monopoly capital towards big business than the UPA was or even Narsimha Rao's government was. So there is no way in which that this economy can come out of it and things will just come back to where they are. The only places where things will improve is banking and financial sector. And if that is a source of added income for some sections of the middle class, which retail investors who put in money in the markets, they get some returns, maybe they'll spend, but I doubt even they'll spend. They're likely to actually keep taking that money out and saving it for a rainy day. Because there is no way right now as a Keynesian economist used to say that people do not know what no current experience or past experience in times of crisis can tell you what is going to happen. So people don't have an idea about what is going to happen. They think things will come back to normal. But I think the experience that we see over the past few days has brought in so many months, has brought in so much uncertainty that things are only going to get worse. And that is why even corporate in the Kumaar-Mungal-Villai I read somewhere has said that we should be prepared for a contraction of the economy, not just this year but next year as well. Also any countries which have actually managed to sort of go in the opposite direction at least as far as employment is concerned, so many examples from around the world which have successfully kind of been able to address not only this crisis but over the past couple of years. So I would say that successfully employment-wise you know the US example has been pretty good for the last couple of years. But again this is data which has to be unpacked. For instance in the US the average I think pay, average pay per hour has gone up but the number of hours has reduced. The number of people who have to do more than two jobs or more than one job has actually gone up. So on paper the data seems to suggest that higher lower levels of unemployment in the US before COVID-19 and but unemployment is a story across the world that we're seeing everywhere including China which has huge amounts of unemployment and which does not come up in the data where you see. The US had tried to provide you know some kind of subsidy, employment subsidy, payroll subsidy which said that you can take this loan and you don't have to pay back this money if you use it for direct office expenses and to pay people. There's been large-scale fraud reported there and I think people have been borrowing and investing in the market and not really paying their people but some amount of that has sustained US economy but given that US is such a heavily services-driven economy that when the lockdown happened obviously we know what happened to US GDP has completely collapsed and unless there is sustained continuous support by the government the problem Prashant is that what does this support by the government actually mean? Support by the government is essentially to prop up private business that's what it is. So the support the government gives is to keep propping up the system which has collapsed which is not working at all and that is something that is not likely to change obviously because it's ruled by finance. Finance capital is not going to let states suddenly turn against them that is not going to happen. Thank you so much for talking to us. Thank you Prashant. That's all we have time for today we'll be back on Monday with more news from the country until then keep watching NewsClick