Restructuring employment in a COVID-healing economy

Well into the second half of the year, the corona virus is no longer big news, and definitely something we’ve long accepted. The consequences of economic lockdowns have been presenting themselves one after the other for months now, essentially creating a new normal that we’ll be living in. As circumstances allowed, work quickly began for many in the safety of their own homes and is now changing the dynamic of the labor force, and employment as a whole in the economy.

Though decreasing by small increments annually, the larger portion of sector wise employment in India belongs to the primary sector, specifically agriculture, at about 43.21% of the labor force. With poverty and income inequality as already burdening issues in the country, a focus on working from home would drastically widen that disparity. Those that can work from home are often privileged with higher paying, professional, white collar jobs which we know, though rising, do not even amount to 1/3 of the country’s population. Daily wage workers in the country all work in jobs that require manual labour, and with those at a halt, during and after (most likely) the virus, a pay freeze/job loss is inevitable, while the smaller percentage continuing to work will still continue to get payed. A prominently large Income disparity in a country, especially a developing one like India, will hit the overall standard of living like a truck as with a loss in income, comes the inability to afford even the most basic needs. Additionally, any loss in the primary sector is bound to create a trickle down effect and impact other sectors too, as they can be interdependent with one another in various stages of production. A loss of efficiency will thereby create a failure in the market where resources are being under allocated and production falls and continues to do so, until a new-adjusted for a post covid era-process is adopted. This will however, be highly detrimental on small businesses and jobs, which will be forced to shut down as opposed to their larger scale counterparts that can bear the brunt for the long run.

On the other hand, it is likely that new jobs will be created. This doesn’t refer to bringing back lost jobs, but rather as lifestyles and demands change, a demand for certain type of jobs will be on the rise and will hence create more opportunity. This will be especially seen in the tertiary sector for occupations in IT, e-commerce, healthcare, entertainment etc… We’re already aware that while agriculture employs more labor in the country, the service sector generates the most GDP, which for a country aiming towards landing amongst the developed, is imperative. The creation of new jobs in this sector will surely act as a strong drive to do exactly that. It will be interesting to see how two opposing ends work together to get the economy out of a recession. On one end, taxi and food delivery services may work double roles in transportation of goods and packages, something we’ve already begun to see around the world. On the other, as mentioned before, new jobs unrelated to those lost, will be created due to a structural paradigm shift in the economy. It is rather a well put together paradox in the hierarchy of the market. Occupational and (sometimes geographical) labour mobility will be most important in bottom of the pyramid jobs to make up for the several lost, and as we go up the structure, we’ll notice an increasing irrelevance of that factor as work from home becomes the new norm, allowing many to work in high paying professional jobs without having the restraint of location or occupational immobility holding them back. This, fortunately will allow many more people, who were before unemployed for reasons of their own, to join the labor force, referring to a greater number of female, crippled, and even differently abled to begin earning. With a more equal workforce, a diminishing in the wage gap between a man and any minority can be looked forward to, not necessarily immediately, but definitely in the intermediate future.

To generalise the trend seen throughout history and combine it with the depth of the recession we’re currently in, we can predict that with a new found demand for jobs in certain industries and sectors, the type of employment demanded will also change. Businesses will most definitely look to reduce their marginal costs the lowest they can with labor being the most convenient tool to manipulate. Zero hour contract jobs, part time work, and “Gig work” will be more attractive to businesses reducing variable costs, and will be one of the main ways middle and lower class workers will be able to earn their bread. While to some extent this may promote efficiency and labor productivity, on-demand Labor has a reputation of creating unstable incomes and insecure employment which has shown to be a strong deterrent for anyone looking to work. If this were to be the case, the government will not be able to get away with just the tax “deductions” they offered in their economic stimulus package, but will in fact have to design policies such that there is a much stronger income support for these workers, and a not so grave burden is felt.

It is expected that with these changes in employment, a consequential impact on housing/real estate would present itself in the form of drastically lowered prices, especially with little need for commute to and fro an office environment. It will also be required for the public sector and private data/internet providers to make connectivity the most accessible it has ever been, along with technological device retailers, who will see a drastic rise in demand as new jobs emerge.

A country’s economy would amount to absolutely nothing without labor and enterprise bringing things together. Therefore, a shift so extreme yet entirely inevitable, will have to be so carefully guided and protected by not only the government, but the private sector too, to achieve a smooth transition into a new ordinary/standard, and direct it to a path most beneficial to the people of the country, and in turn, the crippling economy.