Employment levels have improved in the first week of June, since the commencement of lockdown. While India's urban unemployment rate fell to 17.08 per cent in the week ended June 7, there was marginal improvement in employment levels in rural India as rural unemployment rate stood at 17.71 per cent in the first week of June, revealed data released by the Centre for the Monitoring of Indian Economy (CMIE).
According to Livemint, the national-level unemployment stood at 17.5 per cent. The urban job loss rate now stands less than both the national and rural unemployment rates and is expected to come down gradually as more businesses open up, stated the report. Meanwhile, the urban employment until the last week (week ending May 31) stood at 25.14 per cent and rural employment was at 19.92 per cent.
Economists believe that the unemployment rate may prove sticky going forward. This is mainly due to closure or downsizing of workforce by many medium and small enterprises.
According to the CMIE data, the urban unemployment rate was the lowest in 11 weeks and less than the 17.08 per cent recorded on the week ended 22 March, two days before the Prime Minister announced a nationwide lockdown. The peak of urban unemployment rate was 30.93 per cent in one of the weeks during the lockdown period.
It has to be noted that in the month of May, while the unemployment rate remained very high at 23.5 per cent in May 2020, labour market conditions improved during the month. According to CMIE's managing director Mahesh Vyas the labour participation rate and the employment rate improved significantly in May. The total number of people employed increased by 21 million during the month of May 2020. “The unemployment rate at 23.5 per cent in May 2020 was the same as it was in April 2020. But, the labour participation rate improved from 35.6 per cent to 38.2 per cent and the employment rate improved from 27.2 per cent to 29.2 per cent.” However, the main labour market metrics indicate an improvement in May compared to April, the labour market conditions still remain much weaker than they were before the lockdown, stated Vyas.
“Over a 100 million people were still out of jobs compared to employment in 2019-20. Nevertheless, this is an improvement over the situation in April 2020 when employment had fallen to 282 million implying a loss of nearly 122 million compared to the average employment in 2019-20.”
