Covid-19 wipes out 37% of wages: Study

Between one and two crore people, including regular, temporary, and casual workers, self-employed, and small entrepreneurs in different sectors, lost their jobs due to the immediate impacts of the first wave of Covid-19, a study says.

About 16.38 million people became new poor due to the reduction in overall wages by 37% while the earnings of salaried workers came down to about half of the regular wages, according to the study.

Despite the families of low-income workers facing different types of financial difficulties, including their inability to pay house rents, utility bills, and school fees, the stimulus announced by the government reached only 8% of the total employed population during the crisis, said the study conducted by the Centre for Policy Dialogue (CPD) and Bangladesh Institute of Labour Studies (BILS).

It revealed that about half of the urban slum residents reduced their food consumption and 67% of slum dwellers used their savings to meet family expenses.

Yet, poor workers were allocated only 35.4% of the Tk1,26,853 crore stimulus declared by the government to face Covid-19 impacts, and the lion's share of the stimulus for workers remains undisbursed.

The study report was unveiled at a dialogue titled "Recovery of the Labour Market during Covid-19: Role of Trade Union" on Saturday.

Experts, economists, politicians, and labour leaders recommended extending the role of trade unions to ensure the betterment of wage earners and sustainability of employments.

Experts urged the government to support unionisation activities and the employers to come forward to facilitate setting up more trade unions in different sectors. They urged unions to find innovative measures beyond organising traditional movements and programmes.

Dr Khondaker Golam Moazzem, CPD research director, presented the keynote. He said the majority of workers are not unionised in the country and only 4.2% of the total labour force are active trade union members.

He said trade union activities are observed in a few sectors, such as transport, readymade garment, construction, and jute. 

"During the pandemic, trade union activities were largely reflected in these sectors, mainly through basic trade unions and federations. Such a segmented form of trade union activities was unable to address the concerns of workers who are mostly non-unionised."

Moazzem said workers in manufacturing, construction, transport, wholesale and retail trade, food and accommodation services, and personal services are facing a high risk of unemployment while the risk level of sectors, such as finance, domestic services, retail estate, and education, is medium high.

"Despite some signs of recovery in the labour market, about 69% of the employed population in urban areas, who contribute to 49% of the economy, are in a high-risk state. The second wave of Covid-19 would delay the recovery for this segment," he observed.

The report said the workers' overall wages had declined by 37% and the decline in income of salaried workers was much higher at 49%.

Moreover, small and medium enterprises lost 66% of their revenue during the pandemic compared to the pre-Covid-19 period. The income of all families, including migrants, dropped by 20% during the pandemic.

The poverty rate increased to 33% in the fiscal year 2019-20 from 20% in FY17, the report said.

Moazzem said the humanitarian role of trade unions was more stable in the time of the pandemic and they took initiatives to provide food and cash support to jobless workers.

"Different tripartite discussions and negotiations held during the crisis had ensured limited success for workers as well as micro, small, and medium enterprises regarding coping with the risks and rebounding from the crisis," he said.

He further said there is a need for a tripartite discussion and a joint statement on ensuring the interest of workers through implementing long-term policies.

The researcher also said unions had failed to play a consistent role in ensuring growth in the field of employment and protecting jobs by influencing fiscal and monetary policies, reducing inequalities, and ensuring the protection of female and disabled workers.

CPD Chairman Professor Rehman Sobhan said, "Obviously, there are practical problems for trade unions to function as they are not in the position to communicate on a regular basis with workers because of the Covid-19 restrictions."

"Maintaining safety and social distancing at work is quite important," he said, adding that trade unions should monitor the working condition at factories and produce a report on this.

CPD Executive Director Dr Fahmida Khatun said, "The impacts of Covid-19 were largely reflected in the labour market. Layoffs and furloughs have become very common. We do not know how long Covid-19 would linger."

"The problems that are emerging between workers and employers have to be resolved through trade union dialogues," she added.  

Naimul Ahsan Jewel, member of advisory council at BILS, said there are 6.35 crore workers in the country and they had lost earnings amid health risks while struggling to earn livelihoods.

"I saw that it had taken a long time to resolve the layoffs at some factories caused by the pandemic. The government was interested in resolving those, but owners were not," he said. 

"The European Union gave the government $113 million in incentives for the export-oriented sector. Workers were supposed to receive Tk3,000 for three months each from the incentives. But only 6,040 workers received money for two months."

He urged the government to provide stimulus to all export-oriented industries and not only to apparel.

Naimul added, "Following an initiative of the labour ministry, a crisis management team was formed across the country. It comprised 315 members and tripartite representatives.

"We tried to get government incentives through the team. But we could not get that in most cases. The team did not have an effective role in different districts. What they had was on paper only."

Nazrul Islam Khan, secretary general and executive director at BILS, said, "Social dialogues are essential to resolving the Covid-19-induced crisis arising in the labour market."