Economy

Job loss and Corona

P. Kirubhakaran

The effect of Covid-19 is spreading all over the world uncontrollably.  It has crushed the global economy and has locked down the whole world. There is no escape from the virus for both rich and poor countries. The virus has already claimed over 4 million lives while turning the lives of millions of people upside down. The pandemic has become the worst global catastrophe since World War II. Therefore, Sri Lanka’s economy is facing a disastrous situation amidst a global economic crisis.

A Chinese woman was identified as the first Covid-19 patient in Sri Lanka on 27th January 2020. After that, the first Sri Lankan national was diagnosed in Italy on 2nd February 2020. Vice Consul-General of the Sri Lankan embassy in Italy, Ms. Prabhashini Ponnamperuma verified it. The first Covid-19 patient was diagnosed on 11th March 2020. He was a 52-year-old tour guide. The first Covid-19 death in Sri Lanka was recorded on 28th March 2020. Sri Lanka’s nine-month-long first wave of Covid-19 started on 11th March 2020 and ended by October 2020.

The second wave emerged from a garment factory in Minuwangoda on 4th October 2020 and prevailed until 21st April 2021. The third wave started on 21st April 2021 and caused a massive impact on Sri Lanka. All we heard on the news since the beginning of 2020 were infections, deaths, lockdowns, isolations, travel restrictions, job loss, the struggle for livelihood, suffering from hunger etc.

In the private sector, the employees were severely affected due to the waves of Covid-19 in Sri Lanka. This article is focusing only on the job loss and insecurities faced by the private sector.

Unemployment increases when the population and education opportunities increase in developing countries. Due to the increased use of machinery and technological advances, the need for human labour is gradually decreasing, minimising job opportunities. Every country in the world has implemented curfews and travel restrictions due to the spread of the Coronavirus. It has created a situation where people are not only gaining new job opportunities but also losing their current jobs. 

The number of public employees in Sri Lanka is over 1.1 million. Meanwhile, there are over 3.4 million workers in the private sector. There are also 2.7 million self-employed persons while there are over 200,000 employers in the private sector. In short, over 60% of the Sri Lankan labourers are daily wagers. In Sri Lanka, the private sector includes garment factories, free trade zones, business sector, plantation industry, media, tourism sector, private transportation sector and the construction industry. The entire private sector is affected now in different ways, and hundreds of thousands of private-sector employees have lost their jobs and incomes, making them helpless. 

The most crucial advice managers give to their employees is, “You should be the last person when a company is considering a staff reduction. You should be the first person when a company is considering for promotions.” As of today, every private sector employee is beginning to understand the importance of this advice.

Companies in the private sector are under massive pressure due to the measures such as lockdowns and travel restrictions taken by the government to avoid the spread of the virus. Due to the prevailing economic crises and the effect of the pandemic, Sri Lankan private sector is taking steps such as firing employees, introducing voluntary retirement schemes, reducing the basic salary, and refusing to provide perks as before. They have planned to recruit newcomers for low wages, if necessary. The private sector companies are following a policy of exploitation of human labour by firing half of the employees working under the ‘work from home’ initiative and putting their workload on the remaining staff. ‘

Private companies have started reducing staff and cutting wages to keep their profits and to cover their losses. The reasons for this are not only the effects of the Coronavirus pandemic and government actions like lockdowns and travel restrictions. There is an indirect reason as well. Most private companies were expecting to reduce their staff even before the pandemic but did not get an opportunity. Therefore the current pandemic situation is helping the companies achieve that expectation. Therefore these companies dismiss contract employees and non-permanent employees. They also cut the wages of permanent employees by 10%, 20%, 50% etc.

In addition, women are more likely to lose their jobs due to the pandemic than men. Six out of ten dismissals of employees during the pandemic are women. Most private companies recruited more and more women for a low wage. As a result, the number of female workers in the private sector remains at a high level. Therefore staff reductions have the most effect on them.

Private-sector workers and artists, entrepreneurs, farmers, retailers, and many others have lost their jobs due to the travel restrictions and lockdowns imposed to stop the spread of the virus. Especially due to the ban of public gatherings such as weddings, receptions and religious festivals; those who make a living on those occasions such as musicians, photographers etc. have lost their living. Therefore revenue streams of their families are hugely affected.

You can find a new job if you lose your job in a standard time but the current situation is different. Losing your job even in an average time will cause a significant economic crisis and distress. It is much worse these days with the pandemic situation. As a result, many people are severely traumatised. It is a huge challenge to find new job opportunities when the companies in the private sector are engaged in a staff-reduction programme. Hence, the future of everyone who lost their jobs and their families is in balance.

At the moment, the whole of Sri Lanka has paralysed due to the Coronavirus pandemic. As a result, private-sector workers, self-employed persons and daily-wage workers have lost their jobs, and they are trapped in their homes without any income. In such a situation where there is no daily income, they are in a situation their savings are gradually depleted for daily needs. As a result, the unemployment rate in Sri Lanka is increasing as the Covid-19 waves prevail in Sri Lanka. Meanwhile, new job opportunities will not be created for another few years. Due to that reason, the unemployment of Sri Lanka will have a significant impact in the recent future.                         

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The views and opinions expressed in this publication are those of the authors. They do not purport to reflect the opinions or views of the Sri Lanka Press Institute.

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