Covid-19 compounds labour woes

Published March 22, 2021
The pandemic hit the labour-intensive informal sector probably the worst. — AFP/File
The pandemic hit the labour-intensive informal sector probably the worst. — AFP/File

Mild-mannered Ameena, a widow, was fairly content before Covid-19. She lived with her son’s family. He was a driver and she worked as a part-time cook. She was looking forward to her only granddaughter’s admission to a private English medium school in the vicinity.

His son earned Rs30,000 a month. With Rs20,000 that she made as a cook on call, her life was hard but tolerable. The pandemic turned her world upside down. In the lockdown last year when she lost work, the family became hostile towards her. She was asked to leave soon after her son became redundant and was asked to quit as his master started working remotely.

Ameena, who supported her family of three daughters and a son after the death of her husband, says the past year tested her endurance more than ever. As to why she did not ask her married daughters for help, she says: “The pandemic impacted them harshly. Orders for sewing work that they used to do at home dwindled. The fate of companies or contractors that employed their husbands was no different. They all are doing odd jobs since and remain idle for weeks at times. To land a stable job, they might need to re-skill, which is difficult with petty jobs. My daughters needed relief not an additional liability.”

The vulnerability of a system already under political pressure will only increase if the trend of joblessness is not reversed

After shuttling between friends and relatives in extreme stress, she decided to take up work as a housemaid from a single old lady living by herself. Ameena told Dawn, “My son is now a handyman working for a contractor friend. The family doesn’t sleep hungry from what I know. He is, however, not making enough to put his little girl in school. After clearing debt, piled over the year, if my job lasts I will pay for my granddaughter’s schooling, though I may never be able to excuse my son and his wife. The pandemic cost me my relations. It’s never going to be the same for me.”

Ameena lived in Orangi Town, the biggest unplanned settlement in Karachi, in a rented place. Some of her neighbours, she says, fled back to their hometowns and villages because of the unbearable financial stress and no end to the pandemic in sight.

Thus far, Pakistan has been among the luckiest of nations where infections and deaths were comparatively contained. But the early indicators suggest it could end up among the worst in terms of Covid-19–induced inequality and poverty. The pandemic hit the labour-intensive informal sector probably the worst. The sector is the lifeline to the poorest and offers avenues of supplementary income to middle-class working families.

The assumption of the government that the generous relief package to the corporate sector would increase investment and hiring has not materialised so far. Most companies boosted dividends by trimming wage bills and payrolls, it seems. Little wonder then that corporate profits and stock prices surged while the pool of the jobless youth swelled and incomes of middle- and low-rank workers fell. Many pre-pandemic middle-class families were pushed down to join the ranks of the poor over the past year, poverty estimates show. From around 25 per cent in 2018, poverty is said to have doubled to 50pc in three years, according to initial unconfirmed estimates.

“While global experts advise a human-centred recovery for building back better, the PTI government policies favour the elite. It offered a slew of monetary and fiscal incentives worth about Rs3 trillion to businesses to steer recovery and spent barely Rs200 billion on cash transfers to very poor households. It should have heeded the advice of experts and made some part of corporate incentives conditional to job creation and pay raises for workers,” commented an economist privately.

Informed sources at both tiers of the government were not aware of any structured exercise to gain a better insight of the broken labour market, a first step to fix it. No one today contests that a dynamic, reasonably fair labour market is crucial for the sustainability of an economy. The vulnerability of a system already under political pressure will only increase if the trend of joblessness is not reversed. If allowed to persist, the current situation can trigger another cycle of crisis and potentially widespread unrest.

“The government might succeed in tackling the opposition but not even the strongest of the governments can survive if constituents withdraw their support. People need jobs and a decent increase in salaries. I don’t see the current rulers paying sufficient attention to the rising discontent,” commented an analyst.

“It’s good the civil servants (up to Grade 19) succeeded in forcing the federal government to grant a 25pc increase in salaries, but they make a tiny fraction of the labour force that is the ninth largest globally. What about the rest?” said an Islamabad-based labour economist.

Relevant officials in Islamabad were approached, but their response did not arrive till the filing of the report.

In its latest seventh Monitor edition, the International Labour Organisation presents new estimates of the total loss in labour income in 2020 resulting from working-hour losses.

“Global labour income is estimated to have declined by 8.3pc in 2020 relative to 2019. The estimates indicate that the greatest labour income loss, amounting to 12.3pc, was experienced by lower middle income countries… However, this masks a large disparity within the country income groups, with significant variations occurring across geographical regions… Women have been affected by the employment loss to a greater extent than men. At the global level, the employment loss for women stands at 5pc in 2020 versus 3.9pc for men.

Published in Dawn, The Business and Finance Weekly, January 22nd, 2021

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