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In the line of fire

Who?s next? A fear that most across the globe are living with. The economic downturn is assuming unprecedented and worldwide dimensions, and ILO?s recent prediction has left most shaken. What?s in store for you?

Software geeks, factory workers, investment bankers, coveted consultants, vulnerable unemployed, you and me. The fear of unemployment around the corner has been a great leveller. The line of fire has singed many already and media headlines, demonstrations, blogs, analysts all predict worse times ahead. With the International Labour Organization?s Global Employment Trends Report 2009 reporting 51 million jobs worldwide disappearing by the end of this year owing to the slowdown, India too is feeling the heat, with five lakh jobs cuts reported between October to December. Speculations suggest that numbers could increase. Praveen Jha, expert on development economics and labour, CESP, JNU shares, ?My fear is that the numbers might be even more. Our employment estimates are underestimated. As in India the unemployment data cannot be calculated owing to huge disguised unemployment and open employment. The Tirpur garment hub has had 15,000 job losses already. All the leading growth sectors of the economy, right from IT, auto, real estate are adversely hit, so the numbers are bound to rise. And nobody has a clue about how long this ?depression? will last.?

Experts agree that these job losses will have social, psychological and economic cascading fallout affects that will be felt for a long time. As Kuriakose Mamkoottam, Professor Human Resource Management and Industrial Relations, FMS, University of Delhi affirms, ?It is a cycle. Market will go further down as their will be no purchasing power owing to cuts. Even if things start to fall in place, it will take considerable time for the consumer to stabalise and get back to his consumer status. ?

As the global recession will deepen, it will invite stricter labour laws from countries exporting Indian labour, adding fuel to the fire. As NS Rajan Partner, Human Capital, Ernst & Young, confirms, ?As the global recession will grow deeper, policy pressures in countries with Indian labour will increase and lead to stringent controls. Automatically there will be pressure on cutting down jobs out-sourced to India. With returning migrants and reverse brain drain, the unskilled employed will be worst hit. And hence lead to a situation where pressure will start increasing on every employment layer.?

Get set

While most are questioning the role of the government and corporate houses, what is evident is that substantial number of layoffs can be avoided. Mamkoottam explains that since laying off is the easiest thing to do, corporate houses go in for them, though weakening themselves in the process. If they decide to absorb a little less profit and re-examine the whole process then things can be salvaged. Jha asks why the government is still confused about the stimulus packages, ?It still can?t decide between a sector specific and a general one. The earlier two packages have hardly been impressive and obviously will take a considerable time to start making an impact. Since it?s an election year, the government might be able to stick its neck out but how much will it be able deliver in terms going beyond just a populist step to a substantial one will remain to be seen.? Experts feel the government should have proactive as China was in boosting rural demand.

A sentiment felt all across. As Lawrence Johnson, Chief, Employment Trends, ILO, cautions, ?This is for the first time that all economies are hit at one point in time. Therefore the remedy has to be a consolidated one. Stimulus packages have to be interlinked. It does not mean that we should go back to being a protectionist state as it is against trade. In the developing countries the hardest hit vulnerable unemployed will go up to 200 million. From 1997-2007 considerable progress was made in the economic sphere. If nations do not act together, all the gains will be wiped out in a single year.?

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First published on: 08-02-2009 at 23:34 IST
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