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The lingering crisis of labour post-pandemic

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    The lingering crisis of labour post-pandemic

    The International Labor Organisation (ILO) has recently released two reports: ‘Global Wage Report 2022-2023 and ‘Asia-Pacific Employment and Social Outlook 2022, highlighting the global employment scenario (post-pandemic).

    What does the data show?

    • According to the Ministry of Statistics and Programme Implementation, the nominal wages rose to ₹17,017 per month in 2021 from ₹4,398 in 2006.
    • But when inflation is taken into account, real wage growth falls to -0.2% in 2021, down from 9.3% in 2006. (in contrast, real wage growth in China was around 2% (2019-2022).
    • Negative Growth: The negative growth in India started after the pandemic.
    • Neighboring Countries: In China, the growth decreased from 5.6% in 2019 to 2% in 2022.

    In Pakistan, the growth is -3.8%

    • Impact on low earners: The greatest impact was on lower-income earners as they have to spend most of their disposable income on essential goods and services.

    Impact of job loss and decrease in wages:

    • Millions of workers will be in a dire situation: The increasing cost of living has the greatest impact on lower-income earners.
    • Income inequality will rise.
    • Poverty will rise: 75 to 95 million people were pushed into extreme poverty during COVID-19.

    What are the ILO’s remedies?

    • Prudent price expectation: It is crucial to safeguard the standard of living of low-income households against unexpected future inflation hikes.
    • Managing wage inflation: The potential measures which are to be taken to safeguard the standard of living must not come from undesirable wage inflation.
    • Creation of decent formal wage employment: It is a prerequisite for a more equitable distribution of wages and income, and is a key contributor to equitable and sustainable wage growth.
    • Focus on the gender pay gap: The governments must focus on the gender pay gap as when women leave the labor market, they are less likely to return than men.
    • Collective Efforts: Collective efforts are required to gain momentum for growth. The government has to strengthen labor market institutions and wage policies.
    • Multilateral approach: There is an urgent need to address the negative effects of climate change; increasing inequalities; the poverty, discrimination, violence, and exclusion endured by millions of people.
    • Taking down Discrimination: The discrimination that women and girls continue to suffer in many parts of the world must end.
    • Ensuring HealthCare: Access to vaccines, adequate sanitation and essential healthcare for all must be ensured.
    • Reducing digital divide: The growing digital divide between poor and wealthier countries needs to be reduced as it poses a potential speed-breaker when it comes to equitable growth.

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