1.5 million job losses in August in formal and informal sectors: Report

The gains made in employment generation in July 2021 were reversed a month later, in August 2021, as the unemployment rate rose in rural and urban India last month.

According to the Centre for Monitoring Indian Economy (CMIE), over 1.5 million people from both the formal and informal sectors lost their jobs in August.

The CMIE data reveal that the number of employed fell from 399.38 million in July to 397.78 million in August, with rural India alone facing nearly 1.3 million job losses.

Consequently, the unemployment rate in the country rose to 8.32% in August, from 6.95% in July.

On a closer look, the data from August further reveal that the labour market experienced bigger damage, in already turbulent times, due to the low-paying and temporary nature of jobs.

Key employment-generating segments, such as manufacturing, mining, food processing, construction, etc., shed millions of jobs in August. The job losses in these segments were counterbalanced by the addition of service jobs in rural India, followed by employment opportunities in utility, a Mint report noted. 8.4 million jobs have reportedly been added in the non-farm rural job market, with 5.5 million getting added in retail trade and 3.5 million in personal, non-professional or support services.

The monthly CMIE data from July had shown an opposite trend, with 16 million jobs being added from the month prior. However, as Mahesh Vyas of CMIE wrote, there was nothing to rejoice as the additions happened in the sectors generating low-paying or temporary employment.

The growth of employment in July was mostly among the agricultural labourers and construction workers, Vyas wrote last month. The addition of jobs in agriculture reflected a seasonal pattern, emerging due to the increase in sowing activities.

Experts and economists, commenting on the latest CMIE data, said that the job losses in August were due to agricultural labourers losing their chief source of employment in farm activities, as the Kharif sowing season has ended. It has been further noted that people were moving out from agricultural work to other sectors, such as retail trade, non-professional services, etc., with the movement hinting towards the unavailability of secure employment opportunities in the labour market as a whole.

A similar trend was observed last year, where majorly insecure and low-paying work was available in the market after the easing of lockdown restrictions. The maximum hit was experienced by people employed in regular salaried jobs, as that segment saw a dip in its numbers, as per the State of Working India 2021 report. At the time, the report had noted that people moved from salaried jobs to informal labouring jobs and self-employment.