Unemployment rate in Kerala and Telangana spikes in May, above national rate of 23.5%

In Telangana, the unemployment rate increased by a whopping 28.6 percentage points from April to May 2020.

Amid the two-month nationwide lockdown, the unemployment rate in states such as Telangana, Kerala and Tamil Nadu in May 2020 are above the national unemployment rate of 23.5%.

According to the Centre for Monitoring Indian Economy (CMIE), the unemployment rate in Kerala increased by 9.5 percentage points to 26.5% in May. The unemployment rate in Kerala in April was 17% and 9% in March 2020. Over the past two years, the unemployment rate in the state has largely been in single digits, with the rate being 6.4% in May 2019, and 4.3% in September 2018.

However, the unemployment rate in the country’s most literate state was above the national average in March 2020 (9% vs national rate of 8.8%), in December, October, August, June and April 2019 as well.

In Telangana, at 33%, the unemployment rate increased by a massive 28.6 percentage points from April to May. In April, the unemployment rate in the state was 6.2%. This is also a sharp increase from May 2019, when the unemployment rate in the state was 0.9%.

While Tamil Nadu saw an unemployment rate of 33% in May, it actually fell by 16.8 percentage points from April. The unemployment rate in the state in April was 49.8%, a sharp increase from 6.4% in March.

Among the other southern states, the unemployment rate in Karnataka was 20.4% in May, down from 29.8% in April. However, the unemployment rate in April 2020 is a sharp increase from an unemployment rate of 3.5% in March 2020.

Similarly, in Andhra, the unemployment rate increased from 5.8% in March to 20.5% in April, which marginally fell to 17.5% in May 2020.

As per CMIE data, the unemployment rate for India as of May 31, 2020, was at 23.5%, as compared to 23.52% in April, and 8.75% in March 2020.

Union Territory Puducherry also saw a massive spike in the unemployment rate from 1.2% in March to 75.8% in April, and 58.2% in May 2020. It is the UT with the highest unemployment rate in the country, and is second-highest after Jharkhand.

Across the country, unemployment was highest in Jharkhand at 59.2%, followed by Bihar at 46.2% and Delhi at 44.9% in May. The unemployment rates are produced by CMIE using its Consumer Pyramids Household Survey machinery.

Thousands of people have lost jobs across the country amid the nationwide lockdown over the past two months, which brought businesses across sectors to a grinding halt. Several companies and startups laid off a large part of their employees. Industries such as retail, tourism, hospitality, travel, which employ a large chunk of people formally and informally were worst affected.

CMIE, in a report on May 26, said that job losses may have narrowed, albeit being high at over 24% during the lockdown.

The labour participation rate was 38.7% in the week ended May 24, as against 38.8% in the preceding week. This fall in the labour participation rate came after three weeks of continuous increases.

“While the unemployment rate has been reasonably stable around 24 per cent during the lockdown, the labour participation rate trend seems to tell a story of some interesting changes in the labour markets...The LPR has been rising almost consistently week-after-week in the month. It reached 38.8 per cent as of the week ended May 17 indicating a recovery of nearly half the lost ground of April. The small fall in the latest week does not take away this evidently rising trend. So, it seems that a fairly large chunk of labour that had technically left the labour markets in April is returning back,” CMIE said in a note.

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