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The corona crisis has changed the world overnight including large economies and businesses. The coronavirus effect on jobs and service employees is still by far the greatest. The global outbreak of this virus has seriously impacted the economy and job security of millions with more to come.
Let us briefly state what all has happened till now, - an order to remain indoors and practice social distancing. Companies have asked their employees to work from home. Large gatherings of people are not permissible. Due to restrictions and fear, people are not travelling, dining out, staying at hotels or attending concerts and sporting events. These current trends will continue even after we defeat the outbreak as per some renowned economist.
So, with almost everything at a standstill, what else in the coronavirus effect on jobs can we expect?
It is safe to expect long-lasting, game-changing ramifications post this pandemic. In other words, there will be sectors, businesses and workers that may benefit from this near-tragedy. Unfortunately, we will also witness industries that are severely harmed. People in these areas will lose their jobs and have extreme difficulties finding new ones.
In this article, we discuss where the jobs are and where they will be in the future in a growing and developing country like ours, so read on.
The Coronavirus Effect: Job Market Hit Hard
India’s unemployment rate is climbing to more than 20% with several jobs being lost after the nationwide lockdown took effect in the last week of March. According to a survey conducted by the Center for Monitoring Indian Economy Pvt., an estimated 11.6 crore employees are to lose their jobs by mid-April.
Companies and businesses that are in the travel, hotel, airlines, sporting events, concerts and restaurant sectors will be crushed. International travel has come to a halt till any further notice is out. Companies have generally prohibited business travel. Families are afraid to fly in fear of getting the infection. After what we’ve seen, nobody is going to take a cruise for a while, thank you Diamond princess!
This all will result in a ripple effect. In other words, airlines, aircraft manufacturers and their suppliers, resorts, hotels, restaurants, sporting events, cruise lines, conferences and music concerts will be negatively impacted. With the sudden cessation of business, companies in these areas will be forced to downsize their employees or radically cut the hours that they work. Many businesses may not make it and even close down.
What Economists Are Saying?
The Adecco Group India, a staffing company, has mapped the impact of COVID-19 spread across employment in some Indian industries. About nine million jobs will reduce across the manufacturing clusters of textiles, capital goods, cement, food products, metals, plastics, rubber and electronics. Manpower cuts in the automotive industry started last quarter owing to falling sales.
The coronavirus effect on jobs and the market will only exacerbate unemployment. Adecco estimated that the automobile industry can lose up to a million jobs in the dealer ecosystem, front-line roles, and the semi-skilled. Around 600,000 ground and support roles on contract in the aviation industry are at risk.
Who among the already employed are the most vulnerable? The easy answer is those that don’t have the security of employment; those without any social protection. They are often bracketed as “informal" workers.
A labour market crunch right now can easily turn into a nightmare. Besides the possibility of social unrest, expect more demands for more reservations in government jobs.
“The brunt of the economic impact is borne by the economically disadvantaged," Sabina Dewan, the president and executive director of JustJobs Network, said.
The Coronavirus Effect - A Positive Outlook
Even though the situation may seem quite gloomy, however, there will be winners in this situation too. The big winners will be the online companies that don't rely upon brick-and-mortar locations, healthcare providers, supermarket chains—especially those with a robust online presence— pharmaceutical companies working on cures for diseases, technology companies and services, such as Zoom, that cater to people working from home.
The action so far has only been warning the citizens to abide by the preventive measures stated. The government now needs to take affirmative action in the economic sphere to alleviate suffering. Cash transfers, subsidized food, the extension of loans, access to free medical facilities, lowering prices of important drugs, are some measures that should be taken.
The government should consider compensating registered enterprises for salary payments to an extent to help the workers. The RBI’s efforts on increasing liquidity in the system will help only when there are borrowers. Right now it is not liquidity or interest cost concerns but that all economic activity has come to a standstill. However, the required thrust has to come from the government. We need an effective strategy to cater to the large population of our country.
In conclusion, the coronavirus effect on jobs is a crucial one and despite the lack of planning against this pandemic, we all stand together (6 ft. apart) united and we will be victorious.