Jobs came back in June. Of the 122 million jobs lost in April because of the lockdown, 21 million came back in May. Then, in June over 70 million jobs came back. As a result, by June of the 122 million jobs that were lost, 91 million jobs came back. In June therefore, the employment deficit compared to the 2019-20 average was about 30 million. It was still 7.4 per cent lower than it was in 2019-20. Against an average employment of 404 million in 2019-20, employment in June 2020 was 374 million.
Of the 70 million jobs that came back in June, 44.5 million were those of small traders and wage labourers. This implies that over 63 per cent of the jobs that came back were of these essentially informal forms of employment. This is not very different from the recovery seen in May as well when this category accounted for 68 per cent of the improvement.
Evidently, as the lockdown is relaxed, small traders and wage labourers spring back into their trade fairly quickly. It is much easier for these to get back their employment because they are essentially self-employed. When the environment does not allow them to work - as during a lockdown - they lose employment instantly but, when there is no lockdown they quickly get back into their trade. It may be safe to assume here that while their employment can spring back instantly the same may not be said about their income. Besides, their recovery is still far from complete.
Nearly one third of the total employment in India is among these small traders and daily wage labourers. They are the ones who bore the biggest brunt of the lockdown. In April, which recorded the biggest fall in employment, they accounted for 75 per cent of all job losses. Now, as the lockdown is being lifted, they are the ones who are getting back to work. During May and June, they accounted for 64 per cent of the recovery in jobs.
It is interesting to note that their share in the return is not commensurate with their share in the exit. This could be because the lockdown persists in most metros where they are still not able to get back to work. It is also possible that some of them may have migrated to farming.
While all kinds of jobs have been lost during the lockdown, jobs in farming have been rising. And, the rate of increase of farming jobs has been rising too. In May, employment in farming increased by 1.4 million over its level in April. In June, the increase over May was a massive 11.8 million. While the average employment in farming in 2019-20 was 111 million, in June 2020 it was 130 million. This is a record.
Usually, an increase in farming during economic stress is an indication of disguised unemployment. However, the present increase could also reflect the sharp increase in kharif sowing. In June 2020, kharif sowing was twice its level in June 2019. While this increase is partly a base effect because 2019 was a year of delayed monsoon, it also reflects a substantial real increase in acreage. Employment in farming in June 2020 at 130 million was 16 per cent higher than it was in June 2019.
Anecdotal evidence suggests that because of the increased demand for farm labour in the face of increased acreage and also scarcity of traditional migrant agricultural labourers, local non-farm daily wage labourers and even small traders are switching to undertaking farming activities in their neighbourhood.
A sharp increase in MGNREGA spending by the government has also contributed to the improved employment situation in May and June. Person-days employed under MGNREGA were a record 568 million in May implying a y-o-y increase of 53.8 per cent. It was 441 million in June implying a y-o-y increase of 37.2 per cent. Estimates of June are expected to increase with revisions.
Evidently, a combination of MGNREGA and increased kharif sowing has spurred the employment market in June. Small traders, daily wage labourers and farmers are the main beneficiaries. Of the 70 million jobs that got added during June, 56.4 million or 80 per cent accrued to just these occupations.
The remaining 20 per cent increase was accounted for by mainly business persons. A large proportion of business persons are also self-employed entrepreneurs. Their numbers have grown very rapidly in the past four years.
The number of business persons who reported being employed increased by 10 million in June compared to May 2020. They account for nearly 15 per cent of the increase in employment in June. The number of persons employed as business persons had increased by 5.5 million in May as well. As a result, much of the loss of employment recorded in April among business persons has been recovered. Of the 18.2 million job losses here 15.8 million have been repaired.
Progress of recovery of jobs has been the weakest among salaried employees. 17.7 million salaried jobs were lost in April. This loss increased to 17.8 million in May. In June there was a recovery of 3.9 million salaried jobs. This is the lowest increase in jobs. Of the 70.5 million jobs recovered in June, only 5.5 per cent were of salaried employees although salaried jobs account for 21.3 per cent of all jobs.
While jobs are returning, it is important that quality jobs also improve at the same pace if not a better pace than the other types of jobs.