A nation in lockdown.

A nation in lockdown.

Survey shows large-scale job losses; lower food intake amid lockdown

Slow easing of lockdowns better for global supply chains: Study

Agency Report | New Delhi/London | 3 June, 2020 | 11:00 PM

A survey conducted by the Azim Premji University shows heavy job losses for informal and migrant workers in the four states of Bihar, Jharkhand, Odisha and Madhya Pradesh due to the lockdown. The disruption in the economy and labour markets in these states is enormous. Livelihoods have been devastated at unprecedented levels during the lockdown and the recovery from this could be slow and very painful.

The survey found that Covid-19 and its associated safety measures, such as the lockdown since March 24, have taken a heavy toll on the economy, particularly on the vulnerable informal and migrant workers and their families.

The survey measured levels of employment and earnings since the lockdown was imposed, and compared them to the situation prevailing in February. It covered self-employed, casual and regular wage/salaried workers.

The sample for the survey was selected using the networks of civil society organisation collaborators.

“The findings pertain only to the sample and are not representative of the entire state. Findings should not be compared across states,” it said.

For the survey in Bihar (Rural) with 173 respondents, it said nearly half (46 per cent) of the respondents lost employment. Casual wage workers were more severely affected, with eight in 10 casual workers losing jobs.

More women (55 per cent) lost employment compared to men (35 per cent). More SC/ST workers (58 per cent) lost employment compared to OBC workers (35 per cent). Nearly seven in 10 households had to reduce their food intake during the lockdown.

The SC/ST households were the worst affected in terms of food intake as 85 per cent of them were consuming less food than before.

Nearly two in 10 vulnerable households did not receive rations. More than half (56 per cent) of the vulnerable households did not receive Jan Dhan cash transfer. Four in 10 vulnerable households did not receive any cash transfer, the survey said for Bihar.

For Jharkhand (Rural) with 458 respondents, the survey found that nearly six in 10 (58 per cent) respondents lost their employment. Casual wage workers were more severely affected with 76 per cent reporting loss of employment.

Nine in 10 farmers (89 per cent) were not able to harvest or sell their produce at full price. Four in 10 salaried workers (42 per cent) were not paid salaries or faced pay cuts during the lockdown.

For non-agricultural, self-employed workers and wage workers, who were still employed, average weekly earnings fell by two-third (65 per cent).

Nearly eight in 10 (77 per cent) households reported reducing their food intake during the lockdown. Casual wage workers were more severely affected with nine in 10 (93 per cent) casual wage workers reporting reduced food intake.

Six in 10 vulnerable households did not receive Jan Dhan cash transfer and more than half (54 per cent) vulnerable households did not receive any cash transfer.

In Odisha, the survey of 503 respondents found that two-third (67 per cent) respondents reported losing their employment. The urban self-employed people were the worst-hit with nearly all of them (96 per cent) losing their employment.

The earnings of casual wage workers and non-agricultural self-employed people who retained their employment fell by 80 per cent.

Nine in 10 farmers were unable to harvest or sell their produce at full price. Eight in 10 households reported consuming less food during the lockdown than before. Urban households and migrants were more severely affected with nine in 10 reporting reduction in food intake.

The ration distribution was good with nearly nine in 10 households receiving rations. However, seven in 10 vulnerable households did not receive Jan Dhan cash transfer. A quarter of vulnerable households did not receive any cash transfer.

In Madhya Pradesh (Rural) with 525 respondents, the survey found that almost half of the respondents (48 per cent) lost employment during the lockdown, and the worst-hit were the casual workers, with 65 per cent of them losing their jobs.

More than seven in 10 farmers were unable to harvest or sell their produce at full price. One-fourth of households did not have money to buy even a week’s worth of essentials. SC/ST households were more constrained as compared to OBC and general category households.

Seven in 10 households were consuming less food than before during the lockdown. As many as 45 per cent of all vulnerable households did not receive Jan Dhan cash transfer. Nearly four out of 10 (36 per cent) vulnerable households did not receive any cash transfer.

A cautious approach to easing lockdown restrictions that reduces the risk of later lockdowns may be better for the global supply chain in the long run, say researchers.

The study, published in the journal Nature Human Behaviour, comprehensively assessed potential global supply chain effects of Covid-19 lockdowns, modelling the impact of lockdowns on 140 countries, including countries not directly affected by Covid-19.

“Our study shows the ripple effects caused by lockdowns along global supply chains, with countries not directly affected by Covid-19 still experiencing heavy economic losses,” Study lead author Dabo Guan from University College London (UK) and Tsinghua University, China.

The study found that stricter lockdowns imposed earlier – such as the two-month lockdown imposed in China – are economically preferable to more moderate lockdowns imposed for four or six months, as the duration of lockdown matters more to economies than their severity.

This is because businesses can absorb the shock of a brief lockdown better by relying on reserves and because shorter lockdowns cause less disruption to regional and global supply chains.

Researchers also found that countries not directly affected by Covid-19 may nonetheless experience large losses of more than 20 per cent of their GDP due to falls in consumer demand and bottlenecks in supply chains.

“Our research suggests that shorter, stricter lockdowns minimise the impact on supply chains, while gradually easing restrictions over the course of a year may also be less disruptive than a swift lifting of restrictions followed by another lockdown,” Guan said.

The researchers estimated that gradually easing lockdown measures over 12 months would minimise supply chain impacts compared to lifting restrictions more quickly, over two months, and then introducing a second round of lockdowns in January next year, which they estimated would increase the cost by one-third.

The study used a “disaster footprint” economic model to quantify the direct costs of lockdowns in terms of labour reduction as well as the cascading effects of loss of labour on the supply chain, simulating how constraints to output affect upstream suppliers as well as the firms to which the goods are being supplied.

Supply chain data was drawn from the Global Trade Analysis Project (GTAP) database, which divides the world into 141 economies, with 60 sectors within each economy.

Researchers simulated three kinds of lockdown: strict lockdown in which 80 per cent of travel and labour ceases; a more moderate lockdown with a 60 per cent reduction; a third, lighter lockdown with a 40 per cent reduction in travel and labour.

The strict, 80 per cent reduction is based roughly on China’s lockdown, during which data suggests 80 per cent of travel stopped, while the 60 per cent lockdown broadly reflects the approach taken in Europe and the US.

“Our analysis quantifies the global economic benefits of robust public health responses and suggests that economic justifications to re-open businesses could backfire if they result in another round of lockdowns,” said study co-author Steven Davis from the University of California, Irvine in the US. (IANS)