Income recovery of the informal sector workers depends on consumer spending in the formal sector
The country's fuel consumption has made a significant turnaround indicating economic recovery is well on its way, but incomes in the informal sector have not returned to usual as yet.
Despite the risk of Covid-19 infection, around four crore people have returned to work in the informal sector of the economy since the shutdown was lifted on May 31.
However, their incomes are still to return to the "old normal", although their activities have reached that of the pre-pandemic time. The overall income recovery still remains at less than 50%, according to sources.
Experts say the income recovery of the informal sector workers depends on consumer spending in the formal sector.
The livelihoods of 82% apparel workers have been affected by the Covid-19 pandemic, according to a survey conducted by South Asian Network on Economic Modelling (Sanem).
This blow to the formal sector has had a negative impact on the informal sector's income recovery.
Zahid Hussain, former lead economist at the World Bank's Dhaka office, said people's incomes have not come back to normal level as consumers are only spending money on the very essential because of the uncertainty from the pandemic and many others do not have the spare cash to spend at will.
The economist suggested implementing the Tk20,000 crore stimulus package for the SME in a proper way and increasing money flow to the informal sector which will help increase people's spending leading to full income recovery.
The country's fuel consumption, an indicator of economic growth, shows positive signs as well. Daily fuel use had plummeted to 6,000 tonnes during the coronavirus shutdown from 14,000 tonnes in regular times. Demand of fuel oil has leapt back to 11,000 tonnes now, according to the Bangladesh Petroleum Corporation (BPC).
"Fuel consumption in the country recovered by almost 80% after the movement of public transport resumed," said Ayub Khan Chowdhury, director (planning) at the BPC.
Manual workers hit hardest
Mohhamad Hannan, hailing from Bhola's Char Fasson used to get out early in the day with his rickshaw, then the coronavirus hit.
His income fell to zero when the country was shut down. When almost everyone in the city shut themselves in, Hannan sat out the days until he could not survive any longer. He had to go out to scrape a living only after a few days.
He could not earn enough at first but slowly his income picked up. Now he is earning about 50% of what he did in the pre-pandemic days.
"I used to earn Tk1,100-1,200 per day before the coronavirus hit. Now, it has come down to Tk600-700," said Hannan.
Like Hannan, around 50 lakh rickshaw-pullers have started to work for survival.
The "Mojaddedia Hotel and Restaurant" located in the capital's Merul Badda was shutdown in March after the pandemic started to rage leaving its owner and 24 staff with no income. The workers had no choice but to go back to their native villages in distress.
Later, on June 4, the eatery reopened with the government relaxing the shutdown. The sales at the restaurant are much lower now than normal times and 20 workers have returned to work.
"I would get Tk15,000-20,000 in salary plus tip per month in usual times but I earned only Tk10,000 in the last two months after I rejoined," Ansar Ali, a waiter at the restaurant said.
Like him, around 70% of restaurant workers across the country have come back to work, but their incomes are now less than half of the normal time.
Around 85% of the country's workforce is engaged in the informal sector. A large part of them work on daily and contract basis wages. A sizable portion also works in different shops. Besides, many work at public transports, ports, construction sites and markets. In total, about four crore people are engaged in the sector.
The transport sector also was hit hard when the economy came to a standstill on March 25 this year. Some 70 lakh people in the sector lost incomes because of the shutdown.
In July, bus services restarted but they had to run at half of their capacity following health guidelines. With that their income also dropped to less than 50% that of normal time. Later, in September, they were given permission to run at full capacity and earnings rose to around 70%.
Osman Ali, general secretary of the Bangladesh Road Transport Workers Federation, said despite coronavirus infection risks, transport workers rejoined work for a living. But their income has not recovered yet.
The housing sector is now trying to bounce back from the effects of Covid-19. There are 35 lakh workers involved in the sector, but a good number of them could not get back to work.
Almost 10 lakh hairdressers have returned to work but their income still remains very low.
Bikash Chandra Shil, a hairdresser in the city's Paltan area, said he used to earn Tk1,200-1,500 at his barbershop per day, but now he earns around Tk400-500.
Around two lakh beauty parlour workers are going through the same situation.
Kaniz Almas Khan, managing director at Persona, a renowned beauty salon, said, "Most workers have come back to work after the shutdown ended. However customer flow is still not as expected.
Around 2.44 crore labourers are engaged in the agriculture sector and most of them returned to their normal work. Besides, 30 lakh workers at grocery shops and five lakh workers at pharmacies have also resumed their work. Moreover, 10 lakh artisans at the handloom industry have also returned to their looms with new weaving. Incomes of all the workers are still down by 30-40% than the usual time.
Hossain Zillur Rahman, executive chairman of Power and Participation Research Centre, said "If we look at activity recovery, we can see 83% of people are actively in work."
People's earnings are not the same as they used to get during normal times despite activity recovery, he added.
"A person with a daily per capita income of Tk96 in rural areas can now earn up to Tk53. Our income recovery has not been up to expectations," he said.
Now, all that needs to be done for income recovery is to consider the informal sector – the main force of the economy, said Zillur.