New jobs dry up amid shutdown | The Daily Star
12:00 AM, May 30, 2020 / LAST MODIFIED: 01:48 AM, May 30, 2020

New jobs dry up amid shutdown

ADB study finds 87pc decline in April job postings in Bangladesh compared to last year’s data; sharp fall in textile, manufacturing sector jobs

New job postings nosedived 87 percent year-on-year in April on the leading job search sites in Bangladesh, highlighting the strain the country's labour market has been going through because of the coronavirus pandemic.

The number of job postings dropped sharply from the third week of March, a week after the first cases of Covid-19 were confirmed, and after the ongoing nationwide shutdown was enforced, the Asian Development Bank (ADB) said in a brief note yesterday.

The brief reported on a rapid assessment of labour demand in Bangladesh and Sri Lanka to help understand the impact of coronavirus on the countries' job market.

Relative to December last year, the number of new job postings in Bangladesh was approximately the same in January and 10 percent to 17 percent fewer in February and the first and second weeks of March this year, according to the report.

It fell to 59 percent in the third week of March and 24 percent in the fourth week, it said. Year-on-year, monthly job postings were 35 percent fewer in March and 87 percent fewer in April, although job postings in February were only 1 percent fewer, the brief report said.

A job posting is an advertisement created by an employer or a company seeking to hire an employee for a position.

While online job portal data are not representative of the entire labour market, they can readily capture the impact on labour demand caused by Covid-19 lockdowns, the ADB said.

There are several job search sites and these real-time data could guide social protection and labour policies for better targeting within a limited fiscal space, it said.

In addition, as economic activities are gradually resuming under the "new normal," online job portal data could be continuously monitored in the coming months to assess the progress of economic recovery, the brief said.

The data for the brief came from bdjobs.com, one of the leading online job portals in Bangladesh in terms of number of job postings, as well as portals such as chakri.com, job.com.bd and alljobsbd.com.

In the job portals, registered jobseekers apply to online jobs posted by registered firms.

Following a 7.9 percent annual economic growth by Bangladesh in 2018 -- the highest growth in Asia and the Pacific -- more than 60,000 jobs were posted on bdjobs.com in 2019. There were 200,000 visitors and more than 1 million page views per day.

All industries have, however, reduced the number of new job postings significantly.

The decline has been rapid in the textile industry. The number of job postings in April was down by 95 percent year-on-year in April in textile and education industries and by 92 percent in the manufacturing industry.

The sharp decline in the textile industry may be related to the pandemic affecting key export markets such as Europe and the United States, said the brief report.

Quoting data from the Department of Inspections for Factories and Establishments, the International Labour Organization (ILO) has recently said initially 1,904 export-oriented garment factories closed and an estimated 21 lakh jobs were lost from March 19 to March 31.

In the first week of this month, the ADB said, the coronavirus pandemic would cut 37 lakh jobs in Bangladesh.

The brief report said the manufacturing industry is also affected by disruptions in intermediate imports. While significantly hit, the health sector's job postings saw an 82 percent and the ICT's an 81 percent decline.

The non-government organisation job postings declined by 64 percent, but this was much better than in other industries, possibly due to the need for development assistance in the current emergency, it said.

These results clearly show that businesses stopped hiring workers because of the Covid-19 outbreak.

Job applications declined in tandem with the decreased job postings. Compared to December 2019, the number of job applications stayed around the same level until the second week of March this year, but plunged to 72 percent in the third week, 34 percent in the fourth week and to only 16 percent in the fourth week of April.

Compared to the same month in 2019, job applications were 63 percent in March and 19 percent in April this year, said the brief report.

The government is, however, hopeful its Tk 101,117 crore stimulus packages, which is 3.6 percent of the country's Gross Domestic Product (GDP), will help rejuvenate the labour market once the economy returns to normalcy, said an official of the finance ministry.

Some of the stimulus packages are aimed at providing immediate support to the poor and vulnerable while most of the measures would lend low-cost funds to micro, small, medium and large industries, entrepreneurs, farmers and exporters so that they can resume operations without getting constrained by fund shortages, he said.

The ADB report said continuous monitoring of online job market indicators is necessary in the coming months to understand the impacts of the lockdowns and possible resumption of economic activities.

It also said online job portal data can fill the gap in the current labour market monitoring system by providing time series job posting information in real time. The portal data can reflect rapid labour demand changes, although the data are not representative of the entire labour market, and reflect very little of rural jobs and self-employment.

It is crucial to provide support for businesses and workers to minimise the economic consequences of the pandemic. In addition to public health and disease containment measures, necessary support may include credit provision, salary subsidies, tax cuts, unemployment benefits, and other social transfers, the brief said.

Talking on the issue, Rizwanul Islam, a former special adviser for the employment sector at the ILO office in Geneva, said given the methodology adopted, the coverage of the exercise had to be limited to the formal sector alone.

But this segment accounts for a small proportion of total employment in Bangladesh. The informal economy has been equally -- if not more seriously -- hit by the current shutdown, he said. 

According to a guesstimate of job loss during April, about one crore people must have lost their jobs. If one adds to the 30 lakh who were already unemployed before the crisis, one can conclude that nearly one in five among the members of the labour force in Bangladesh were without jobs in April, he said.

"While it would be difficult to establish the precise number of people who have lost their jobs during the current economic crisis, it would be important for policy makers to adopt policies to help those affected get re-integrated into the labour market," he said.

"It is very much expected that the job postings would go down," said Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, a think-tank. "It is surprising that there have been still 13 percent postings."

Some sectors such as e-commerce might still be hiring but most of the sectors of the economy are either cutting jobs or are making up their mind whether to go for lay-offs, by what portion and since when, he said.

"The disease is paralysing people mentally. So, if we can't control the disease, people will not invest and hire and there will be no question for business expansion," he told The Daily Star.

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