Really rather missing the point

A survey in India showing that many workers suffered complete loss of income during the covid related lockdown.

Examining the impact of lockdown imposed in late March on more than 8,500 urban workers aged 18 to 40 ofIndia’s 1.3 billion population, it reminds us that under half of those surveyed were salaried employees.

A staggering 52% of urban workers went without work or pay during lockdown, while less than a quarter had access to government or employer financial assistance.

Indeed so and as the paper itself says but doesn’t emphasise, the reason is that most Indian workers are not part of the formal economy. Of course, more in urban areas are than up country, but even so, most are not. At which point a certain amount of missing that point.

For they call for new national policies and government to be involved and…..but why are these people not in the formal economy in the first place? Because the costs of employing them formally are more than the gain from the employment of their labour. The bureaucracy, the taxation, the licences required, the risks to be taken - it being near impossible to fire a formal worker, or even close down a loss making operation or company - plus the wages mean both that few are willing to hire formally and also few get hired formally.

Adding to those costs by introducing another right or tax is not going to aid matters.

As Torsten Bell says, we should note what is happening elsewhere as well as gaze at our own coronavirus scarred navels. We might learn something even - like, perhaps our own explosion of gig workers, those without those employment rights, is a function of the cost of formally employing people? A problem that might be solved by lowering said formal employment costs?

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