78pc households cut expenses to cope with pandemic: Study

Sudden fall in income forced 78 per cent of households in Bangladesh to reduce expenditure and 52 per cent of households to change dietary pattern involuntarily to cope with the impact of the Covid-19 pandemic.

The Centre for Policy Dialogue revealed the findings of a study on “Income and Employment in Covid Times: How the People are Coping– Findings from a Household Survey” through a virtual dialogue on Wednesday.

The CPD and Oxfam Bangladesh in association with Citizen’s Platform for SDGs, Bangladesh conducted the survey on 2,600 households between the last week of January and the first week of February 2021.

The survey found around 62 per cent of the employed population lost their jobs at some point mostly in April and May 2020 due to Covid-19. About 85 per cent of the employed people who lost their jobs after the spread of Covid-19 remained unemployed for more than one month.

On a positive note, almost all these people were able to find a job by January-February 2021 when the impact of Covid-19 started to recede.

However, the income of the households declined and the job situation worsened, while the decline in income led to the lower expenditure of households.

“About 78 per cent of the surveyed households had reduced expenditure to cope with the impact of the Covid-19 pandemic, while 52 per cent changed dietary pattern involuntarily,” said Towfiqul Islam Khan, senior research fellow, CPD in his keynote presentation.

On the other hand, more than 40 per cent of the employed population reported that their employment situation was worse than the pre-Covid-19 period.

About 86 per cent of individuals reported that they were not earning enough to meet their daily necessities.

More than half of the households had to resort to borrowings and the average loan size of the households has doubled in the last year.

However, the support from the government was limited to meet the demands to fight the financial hardship.

Only 20 per cent of the households could receive some form of government support, the survey found.

Indeed, a higher number of households received support from private sources including friends, family, neighbours and private charity.

While summarising the dialogue, Debapriya Bhattacharya, a distinguished fellow at CPD, questioned whether the degradation of the labour would persist in future.

To address the challenges, medium-term recovery strategies are important, while the integration of recovery with structural transformation issues is highly important, he said.

He also emphasised targeted support to the disadvantaged groups which were disproportionately impacted by the pandemic.

Agriculture Provides Highest Jobs
As per the report findings, most of the incremental employment was generated in the agriculture sector, while a significant number of people left the services sector.

Given the nature of economic recovery, it is likely that structural transformation went backwards, the report adds.

Jobs in agriculture recorded an 18.24 per cent positive growth, while industrial employment rose by 3.86 per cent compared to February 2020 and January 2021.

But the service sector witnessed 1.54 per cent negative growth. National employment growth was 4.38 per cent in the aforesaid period. 

Self-employed, contributing family members and day labourers have contributed to about 90 per cent of the incremental jobs, indicating substitution of formal by informal sector employment.

CPD chairman Rehman Sobhan said that effectively delivering government interventions, in cash or in-kind, needed to be developed in view of the impact on employment and income.

He also asked the government to take the results of the research into cognisance for devising the policy interventions.

45pc Households Lowered Income
Survey findings showed a higher number of jobs failed to provide similar to pre-Covid or higher income.

On average, income loss was true for both individual and household levels. About 45 per cent of households had lower income compared to the pre-Covid-19 period, it showed.

The decline in income has pushed a significant number of people into lower-income groups – indicating a higher poverty incidence, said the report.

Income inequality also worsened as manifested by lower-income share of the bottom half of the population in terms of income, it added.

As the workers' income declined, Razequzzaman Ratan, President of Socialist Workers Front, asked for a rationing system for the workers so that they could fulfil their food necessities at low costs.

He also demanded specialised hospitals for workers in industrial zones and day-care facilities for children of the workers.

Ratan also called for stimulus to increase consumption.

“A lot of RMG workers lost jobs during the initial phase of the Covid-19 pandemic but they were able to soon return to their work,” said Md Shahidullah Azim, vice-president of Bangladesh Garment Manufacturers and Exporters Association.

Md Shahid Uz Zaman, executive director, Eco-Social Development Organisation, called for incorporating employment in the stimulus packages.

He also said that non-MPO teachers did not receive sufficient support, which would have a negative impact on our education system.