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NRI Unemployment Due To Coronavirus

Updated on May 14, 2020
NRI Unemployment

The global unemployment rate is skyrocketing in the aftermath of businesses shutting down due to the Coronavirus pandemic. Public health measures to slow the spread of the virus across the globe are restricting the movement of people, freezing trade and commerce, factory closures, and disrupting global supply chains. 

The global economy will go through its steepest contraction this year. So far, the outbreak has infected over 4 million people worldwide and claimed more than 280,000 lives, according to Johns Hopkins University. The International Monetary Fund (IMF) has said that such an economic crisis has not happened since the Great Depression. The IMF’s latest forecast shows the world economy at a 3% contraction.

Global Unemployment 

The International Labour Organization (ILO), an agency of the United Nations estimated that nearly 200 million people could end up losing their work. ILO’s initial projection was 25 million people but the latest assessment points to higher unemployment figures: four out of five workforces will get impacted by the pandemic.

During the second quarter of 2020, the outbreak could wipe out 6.7% of working hours all around the globe which is an equivalent of 195 million full-time employees out of work. ILO’s Director-General Guy Ryder said that implementing the correct and urgent measures will make the difference between survival and death. He also said that the current situation is more than a global health crisis, but a major labor market and economic crisis impacting people’s lives tremendously. 

Non-Resident Indians (NRIs) and Coronavirus Pandemic

There are a total of 17.5 million Indian migrants living all over the world as per the United Nations data reported in 2019. Non-Resident Indians are people of Indian origin who hold an Indian passport but are living outside India for employment or businesses for an uncertain period of time. 

According to the Union Ministry of External Affairs (MEA), nearly 2 million NRIs live in 10 countries that have the highest number of COVID-19 cases.

H-1B Visa Suspension amid Coronavirus Outbreak

With rising unemployment rates following the coronavirus outbreak, US Tech Workers that advocate for local hiring have urged the US President to suspend the H-1B visa program.



H-1B visa is a program that allows foreign workers to get hired by US companies to work in high-skilled professions requiring theoretical or technical expertise. Most of these workers hired by the technology companies are from countries like India and China. Employment opportunities, higher wages, better lives, and career advancement are some of the main reasons why many educated, highly skilled Indians go abroad to countries such as the US, UK, Canada & Germany. 

The majority of Indian technology professionals working in the US are on the H-1B visa program. Thousands of immigrants have already suffered job loss due to the massive layoffs. More H-1B workers could lose their jobs due to the recession. Those on H-1B are not eligible for unemployment benefits. 

An H-1B visa holder has to leave the US within 60 days of losing their job as per the current federal rules. Workers on H-1B visas started a petition campaign on the White House website to extend the post-job loss limit to stay from the existing 60 days grace period to 180 days.

President Trump signed an Executive Order to suspend immigration to protect American jobs in April, 2020 amid the Coronavirus pandemic. The good news is that the new Executive Order does not apply to H-1B workers. 

NRIs stranded in India due to the lockdown 

Due to the ban on international travel, many NRIs are stuck in India with the fear of losing their jobs and visas in the US. Many carry a huge student loan burden for their education in the US and are the sole earners of the family.

They have appealed to prime Minister Narendra Modi’s government to arrange for outgoing flights to the US to save their livelihood. 

In light of the suspension of international air travels, the Ministry of finance has announced relief on counted days for residential status for tax purposes.

The job markets for expats are not likely to improve till we see improvement in global economic conditions. Historical data shows that businesses are more likely to fire foreign workers before native-born workers.

Unemployment Rate

Taking the example of the 2008 financial crisis, the average unemployment rate for foreign workers in the European Union (EU) jumped from 11.1% to 16.4%, significantly higher than that for native Europeans.

Impact of Coronavirus on NRI Remittances

 The World Bank predicts a 20% decline in global remittances and 22% drop in remittances to South Asian countries due to the coronavirus pandemic. Remittances tend to be counter-cyclical during other crises, as we have seen during the Kerala floods. Coronavirus is a global pandemic not limited to a state or country.

The job loss and economic uncertainty due to the coronavirus outbreak will be hard on the Indians living abroad and likely to send far less money back to India. As a result, the remittances are projected to fall by 23% to $64 billion this year. 

Top Remittance

India is the top receiver of remittances for years in a row but the global slowdown and travel restrictions are likely to affect the remittances inflow even in 2021. $83 billion was received in 2019 having a growth rate of 5.5% based on a World Bank report. 

Their foreign remittances deposited in Indian bank accounts like the Non-Resident Ordinary Rupee Account (NRO) or the Non-Resident Rupee Account (NRE) in rupee denomination will be significantly reduced. This will impact the Indian economy as remittances to India helps in maintaining the national foreign reserves and drive consumption on micro-levels. 

Worst hit sectors of the economy

Different sectors of the economy have different degrees of impact by the sudden shut down of businesses. Due to the emphasis put on travel restrictions and social distancing, accommodation, and food service industries (144 million workers) are among the worst hits. Other businesses like manufacturing (463 million), retail and wholesale (482 million), business services, and administration (157 million) have also been impacted severely. Together, they account for 37.5 % of the global workforce, with 1.25 billion people engaged in these industries all over the world.

US Recession 

Unprecedented high unemployment rates, an 8.7% decrease in retail sales in March, a 5.4% reduction in total industrial production has plunged the US economy into a deep recession. 

By March, the unemployment rate rose to 4.4% from a historic low of 3.5 % in February. However, the rate has soared past 20%. There are more than 26 million people out of work with 4.4 million Americans claiming unemployment benefits in the week ending 18 April. 

According to the U.S. Bureau of Labor Statistics, 7.1 million Americans were unemployed as of March 13. In total, over 33 million are unemployed which makes the unemployment rate 20.6%- the record high since 1934. The economic impact could exceed the impact of World War II. 

There is also a disparity in the job loss based on race and ethnicity. The March jobs data showed that white people’s employment fell by 1.1% last month, more for black people (1.6% drop), 1.7% for Asian Americans, and 2.1% drop for Latinos. The disparity could be because, in industries that are first hit by the coronavirus such as hospitality, transportation, utilities have a disproportionate number of Black, Asian, and Latino workers. 

According to the Labor Department, the ability to work from home during this crisis is also divided. 30% of the white population, 37% of Asian Americans, and only 20% of Black people and only 16% of Latinos are able to work from home in 2017 and 2018.

Economic Recovery

JP Morgan predicts that the economy will bounce back strongly in the third and fourth quarters based on the assumption that the outbreak will be contained by this period. Policymakers across countries are implementing fiscal and monetary measures to ease the financial burden on people and to keep the economy floating which is under a severe strain.

The unprecedented fiscal and monetary policy to save the global economy would result in a faster rebound but the recovery will take time, even till the end of 2021.  The recovery would be more of a U-shaped rather than a V-shaped recovery. By the latest poll, the growth rate is 4.5%, which is less than the IMF’s rate of 5.8%.

A new report by McKinsey & Company predicts that the recovery of the US and Eurozone economies from the coronavirus crisis will stretch till 2023.

The ILO has urged for large-scale measures and cooperation to protect workers, urgent and right policy to stimulate the economy and retain employment through paid leave and other support.  

Job seekers in the time of Coronavirus

In the battle to contain the virus and with so much uncertainty going on, there is almost no demand for jobs. However, we might be heading to a new way of seeking jobs and getting hired once we see an economic recovery.

There might be a transition from in-person job interviews to online. Candidates might need to upgrade their technology to have better quality audio and camera settings and a good internet connection to get hired. 

Job seekers will have to adapt and learn how to present themselves virtually for job interviews. They will have to be alert and be well informed about the industries in demand during the outbreak and decide their course of action. 

We might see improved platforms that companies will develop to organize virtual interviews or meetings. For the time being tools like Zoom or Hangouts are convenient for video conferencing for work from home jobs. If COVID-19 is to stay for the long term, at least for another two years, we will have to adapt to new ways of working and living. 

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