The recovery in employment after the disruptions due to the Covid-19 pandemic restrictions has been “excruciatingly slow” for the salaried class, though several sectors are bouncing back to normalcy. According to the Centre for Monitoring Indian Economy (CMIE), job losses are concentrated in the salaried class.

“The recovery in salaried jobs was not impacted by the second wave of Covid-19, but the recovery in these jobs seems to be excruciatingly slow,” said CMIE’s MD and CEO Mahesh Vyas in his analysis.

“Employment for the salaried class in August 2021 was 5.7 million lower than what it was in 2019-20. This involves an 8.8 million loss of salaried jobs and 2 million loss of employment to entrepreneurs.”

However, the job losses were partially recovered by a 4.7 million increase in employment in farming and a 0.7 million increase in employment of daily wage workers and small traders, showed the CMIE data.

According to Vyas, the recovery seems to have discriminated against salaried employees and entrepreneurs. Even as several sectors are gradually returning to normalcy following the unlocking across the states, the salaried employees who lost their jobs during the lockdown period can’t go back to the same jobs. It’s also difficult for the salaried employees to find an alternate job of a similar kind.

“These job losses are expected to create greater household stress. Salaried jobs are the better-paying ones and therefore the greater loss in these jobs has a larger impact on aggregate demand,” observed Vyas in his analysis.

Around 86 million jobs were added to the salaried class in terms of employment in 2019-20, which fell to 70 million during the first wave of Covid-19 (April-June 2020). However, during the second wave of the Covid-19 pandemic (April-June 2021), the salaried class jobs rose to 76 million, according to the CMIE data.

“The resilience of salaried jobs to the second Covid-19 wave is comforting but the slow recovery in them is worrisome,” said Vyas.

The recovery of the labour market is also highly skewed in favour of the rural markets, according to the CMIE data. Between 2019-20 and August 2021, 3.7 million jobs were lost in urban India. Urban India suffered 65% of the job losses due to the Covid-19 pandemic while it only accounts for 32% of all jobs, the CMIE analysis added.

On the other hand, rural India lost only 1.9 million jobs and the agriculture sector became a saviour by absorbing an additional labour force of 4.6 million between 2019-20 and August 2021. Over the same period rural India lost 6.5 million non-farm jobs.

According to the CMIE analysis based on the data available for the first three weeks of September, the labour market indicators are improving while labour participation rate remains stable and the unemployment rate is falling.