Labour migration, jobs and society in the Age of the Pandemic

The lockdown is taking its toll. What will it take workers in the informal sectors and small businesses to survive?

Founding Fuel

Ironically, all that India is doing to contain the virus, is choking the economy. And the worst hit are solopreneurs—daily wage earners and workers in industries such as manufacturing, retail, travel and others service related sectors. 

What makes it worse still is that while solopreneurs power the economic engine of Bharat, the soul of India, unlike their peers who work at India Inc, the jobs most solopreneurs engage with cannot be accomplished digitally using tools such as Zoom or Slack. This is because their work insists their feet must hit the ground and sleeves must be rolled up.

Madan Padaki, co-founder at 1Bridge and Gayathri Vasudevan, co-founder of LabourNet have kept their ears to the ground for several decades. As social entrepreneurs, the both of them have focused on enabling and transforming the livelihoods of people in Bharat (or Middle India).

Last week, they engaged in a conversation with Team Founding Fuel, Arun Maira (author and former Member of Planning Commission) and Devangshu Dutta (Chief Executive, Third EyeSight) to unpack the many stories that remain unreported.

There were many questions. What can be done immediately? What can be done in the longer term to carve a better future?

“Different people have been affected to different degrees,” Gayathri Vasudevan told us. To place that in perspective, she explained, construction workers are stuck because the lockdown came without a warning. Her estimates have it anywhere between 200 – 300 million people are employed here alone.

Then there is the auto industry with its strong reliance on services. It remains in a state of limbo. Truckers who were on highways have had to stop mid-way without access to food at dhabas where they usually eat because it has shut overnight. The stories go on and on.

Devangshu Dutta added that India employs over 100 million people in MSMEs. These numbers are just the tip of the iceberg. 

“Layoffs are inevitable, I can’t see anybody lasting this long without a financial package,” Madan Padaki said. “The big challenge,” he said, is that, “small businesses are facing how to meet their requirements for cash”. “Their weekly and daily cash cycles have stuck, their monies are stuck.  They have to receive money from vendors who are not paying, they have to pay suppliers that they are unable to pay”.

As the conversation went on, what we gathered is that no precedents from the past exist to deal with what is happening now. During the Great Depression, 30% of the GDP was eroded over a year. Now, we are staring at something like that in a matter of a month or two. And it isn’t that things weren’t slowing down before that. It’s just that things have come to a grinding halt now.

“Overall,” Padaki said,  “it’s a triple whammy—the first punch being health, the second being mobility and the third being economic activity”

So, is it all gloom and doom? 

Not necessarily. Some entities are asking what is it people need. That is why they are repurposing to create ventilators; while yet others have turned their attention to masks. An opportunity may possibly arise to fumigate and sanitise public areas when things open up. Who knows? As constraints are placed and consumer behaviour changes, new opportunities can emerge.

But challenges will remain. How do you re-skill people at short notice? Most of them may not be digitally literate. How do you deliver learning to those whose hands are needed on the job?

And assuming reskilling happens, the number of opportunities to accommodate everyone are limited. Then there are industries that will take a long while to recover. By way of example, consider beauty and healthcare where people have to get in close proximity with each other. After the pandemic, it is inevitable people will hesitate for a long while to interact closely with other humans. 

While a crisis such as this is challenging, it presents an opportunity for a fundamental reset as well. One where we can strengthen the basics of our economy and build it on the foundational advantages unique to India. And to ensure it is sustainable, holistic and equitable. 

Devangshu Dutta used a lovely metaphor to steer the conversation towards that direction. “If I put on a kind of risk management hat, I like to use the analogy of a beanbag. You know there is foam in it and it is very uncomfortable to sit on it because it is solid. But if you take small form beads, and a shock is delivered, the beanbag can adapt to the shock better. Because now the risk is distributed across a system made up of multiple elements.”

This compelled Arun Maira to craft a question playing at the back of the minds of those listening in: What is the shape of the new economy we must deliberately create?

He submitted that if an economy is not deliberately created, social tensions are inevitable. By way of example, he pointed out how inequitable distribution of wealth led to insurgency in Punjab during the eighties that led to armed militancy.

To stay away from paths such as these, there is a moral argument as well then to start work on creating a new economy that includes all stakeholders, imagine what shape it takes, fight our urge to embrace top-down principles and focus instead on building local capacities that promote local solutions for local problems. 

Who else to do it best, but solopreneurs? 

Still curious? Read how small business owners in Surat are taking care of their migrant labourers and how local farmers in Satara are building a direct farm-to-home model to navigate their COVID19 challenges

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