COVID-19 impact on labour market & employment | By Muhammad Zahid Rifat


COVID-19 impact on labour market & employment

THE human resources of a country play an important role not only in the economic development but also for the social well-being of the country.

Moreover, large population size and lack of proper management of human resources can also lead to some sort of social disorder and distress and cause curtailing of the economic performance.

Because of ever increasing population growth, Pakistan is facing difficulty in optimal social spending ie healthcare, education, housing and unemployment etc.

In this scenario, the advent and spread of COVID-19 has further aggravated the situation.

Fully cognizant of this, the federal government has and continues to take several steps and appropriate measures for overhauling of the ailing structure of the national economy and implementing remedial measures particularly for human capital development.

During lingering COVID-19 pandemic, currently in its third wave, protection and creation of jobs is the second biggest challenge after the health crisis in Pakistan.

The pandemic has quite obviously aversely impacted employment and labour productivity by impeding growth in various economic sectors.

State Bank of Pakistan had taken different measures to cope with the situation and effectively counter the effects of COVID-19 like support to firms in paying wages to their employees amid the lockdown to prevent layoffs under the Rozgar Scheme.

Furthermore, the revival of construction industry through appropriate timely measures of the federal government during pandemic is also one of the major initiatives of the government for employment generation in the country.

Undoubtedly, the COVID-19 pandemic has had devastating effect not only on human life but also posed an unprecedented challenge to the public health and economic growth.

Pakistan has also borne the economic brunt of COVID-19 pandemic that had resulted in negative growth of -0.47 per cent in FY 2020, job losses, falling income and deteriorating social indicators.

According to “Special Survey for Evaluating Socio-Economic Impact of COVID-19 on Well-being of people”, conducted by Pakistan Bureau of Statistics, almost half of the working population was affected due to closure of businesses and lockdown.

As per Pakistan Bureau of Statistics, prior to COVID-19, the country’s working population was 35 per cent (55.75 million).

However, in pandemic closure of economic activities due to imposition of lockdown for health safety, this number had declined to 35.04 million which indicated that people had either lost their jobs or were not able to work.

In July 2020, the federal government announced comprehensive package for the construction industry in the country.

This opening of sectors in which daily wagers were working along with fiscal stimulus and monetary measures commendably resulted in the recovery of the national economy.

Quite appreciably, it was reported that 33 per cent (52.56 million) working population in the country were back more or less on their original or appropriately alternative jobs and resumed working.

The sectoral analysis has revealed that construction and manufacturing sectors were the most vulnerable sectors during this pandemic.

Wholesale and retail, transport and communication sectors were also affected on account of COVID-19.

According to the incidence of population faced job lost or decrease in income, construction sector was most hit to the extent of 80 per cent, followed by manufacturing sector 72 per cent, transport and storage 67 per cent, wholesale and retail trade 63 per cent mining and quarrying 38 per cent, as per the special survey conducted by the Pakistan Bureau of Statistics as mentioned above.

These figures show that COVID-19 pandemic had hampered economic activities in construction and manufacturing sectors due to decline in consumer, business confidence and production and supply chain disruptions.

It was estimated that as much as 80 per cent workers had lost their jobs, either could not find work or received lower income in construction sector.

People were reluctant to invest in this sector owing to apprehensions caused by the COVID-19 prevalent circumstances.

Further, manufacturing sector also observed disruption in production activities because of contraction in demand resulting in 72 per cent workers had either lost their jobs, could not find work or faced decrease in income.

Additionally, the incumbent government had also imposed strict lockdown, for effectively check controlling and the adverse pandemic impacts, which had quite obviously hampered wholesale and retail business and transport & storage business leaving 63 per cent and 67 people to become jobless or have lower income respectively.

Prudent strategies and timely interventions by the federal government have put the national economy on the trajectory of recovery saving the nation from very severe impact of COVID-19 pandemic.

Furthermore, construction sector package and industrial relief packages etc are other key initiatives of the incumbent government resulting in recovery of all segments of the national economy from the shock.

Official quarters concerned, when contacted, have observed that out of 20.6 million people in the industrial sector who had lost their jobs or could not find work during April-July 2020, as many as 18.8 million had started working again during August-November 2020 depicting a V-shaped recovery.

Briefly, the initiatives taken by the federal government during 2020-21 to reduce the adverse impact of COVID-19 and generate employment are Construction Package, Textile Industry Package, Bundal Island project, Export Processing Zones, Ravi River Urban Development Programme and Information Technology (IT) Parks Packages.

Large number of employment opportunities are most likely to be generated as a result of these initiatives if all goes well and encouraging initial results have already started showing up here, there and everywhere with the continued blessings of Almighty Allah.

—The writer is Lahore-based Freelance Journalist, Columnist and retired Deputy Controller (News), Radio Pakistan, Islamabad.

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