for building a democratic labour movement in India
Surendra Pratap, Centre for Workers Education, New Delhi, 2015
Download Paper here:The Labour in the Indian Global Factory and the Social Security Challenge
Commenting on the emerging economic, political and social structure of the world, some one rightly said that we have only two options now-socialism or barbarism. The comment makes a great sense at least in terms of understanding the realities in Asian developing countries. Globalization brings such vulnerabilities for Asian people in their overall life that are comparable to colonial period; and in some aspects even worse. In almost all developing Asian countries, particularly the south Asian countries, the phase of globalization and liberalization coincided with a drastic change not only in economic life but also in social life. It led to drastic increase not only in economic vulnerabilities but also the social vulnerabilities.
On the one hand the globalization brings all sorts of uncertainties. Sustainability of development and jobs created by foreign investments are uncertain; job security at workplace is uncertain, incomes in traditional occupations are uncertain, income in agriculture has become highly uncertain, even the life is always in uncertainty due to increasing number of environmental disasters, drastic increase in occupational health and safety problems, increasing number of epidemics caused by new diseases and drastic increase in crime and accidents. The liberalization is consciously and unconsciously throwing everything in uncertainty to ensure certainty of profits to the capital; promoting casualisation in every sphere of life to ensure sustained profits to the capital. Now everything is becoming casual-jobs, incomes and even the social relations. On the other hand, it is also reducing the power of the people to fight against these vulnerabilities, by way of deregulations at national level and re-regulations at international level reducing the capacity of the people to bargain with their nation states, making capital freely mobile so that it can exploit the global reserve army of labour reducing the overall collective bargaining power of people/labour vis-a vis capital, informalisation and scattering of the industrial workforce both reducing the income and collective power of the working class, states moving out from its welfare functions and abolishing subsidies to the people and reducing welfare expenses, amending labour laws to reduce the overall collective power of the workers and compel them to virtually work in slave labour like conditions etc. Moreover, in the capitalist global village, the Asian community life based on mutual cooperation is abolished and the safety covers offered by joint family and community is lost. The fate of every individual is now controlled by the market, and the market teaches every one to care for only him or herself and survive or perish on his/her own alone without getting any support from anyone. The social security can now be only purchased from the market, and one can enjoy it only to the level he/she can purchase it, and those unable to purchase it are poised to face the hell on this earth all over their life. Lack of enough livelihood opportunities combined with consciously promoted individualism and consumerism has systematically intensified the barbaric competition among the people to get a living at the cost of the other. This is happening not only among the people with in a country; but also among the people of different developing countries. Given the unrestricted mobility of the capital, there is always a threat that investments may at any time fly away to other country and thereby may lead to mass unemployment. The situation is such that only those nation states can win the greater share of foreign investments, and greater export orders, which is barbaric enough to completely suppress all opposition from workers to ensure maximum exploitation of workers to generate super profits.
Does it not resemble to the age of barbarism? It is certainly different, since unlike the age of barbarism, this is unimaginably higher stage of development with problems of overproduction rather than scarcity and also unlike the earlier, it is well planned and systematically imposed by the corporate capital for profit motives. Therefore, we can call it the age of modern barbarism. The vulnerabilities of the people, in this age of modern barbarism are growing to the extent that not only large number of poor people are compelled to live in hell of chronic poverty and dying of hunger; but also they are compelled to opt for suicides. In one decade from 1997-2007, more than 182936 suicide deaths were reported mainly of small-marginal farmers in India.
With the disastrous impact of globalization and liberalization becoming more and more visible, the issue of Social Security is emerging as an important agenda for both-the capital and nation states on the one hand and the labour/people on the other. The motives are certainly different, but for both the compulsions for emphasis on social security are generated by the same ground realities. For labour and the people at large this is an issue of survival in terms of breaking their status as highly vulnerable reserve army of labour, and an issue of regaining their collective power. And for the capital and nation states this is an issue of watering down on the discounts of the people/labour to minimize the chances of anti-capital volcanic movements and to project a better image of corporate led globalization by putting a glossy cover on the barbaric reality, and also an issue of maintaining a reserve army of labour surviving below the minimum standards of living.
Therefore, it is crucial for the people’s social security movements to critically look at the social security initiatives of the state and transnational capitalist class (TCC) and put forward the alternative agenda of social security with transnational working class (TWC) perspective by clearly articulating the commonalities and differences with state and TCC initiatives.
The meaning of civilized society is a society where at least survival (different levels of survival at different levels of socio-economic development) is fully ensured for all; and the workers and the people at large can effectively exercise their powers of collective bargaining to ensure redistributive justice for further improvements in their living standards and working conditions. If the survival is not ensured, then, on the one hand, the workers are actually thrown in the conditions of slavery and it drastically reduces their collective bargaining power; and on the other hand, it means that there is no set base-level for collective bargaining, and in such situations, collective bargaining cannot effectively ensure the redistributive justice and improvements in working and living standards (accompanying economic growth). The importance of labour laws on wages and job security, social security, Occupational health and safety and other working conditions for the larger enterprises of organized sector (as was the case in most Asian countries) was primarily in respect of ensuring survival and setting the base level for collective bargaining. The greater collective bargaining strength and improvements in the working and living conditions of organized sector workers (in comparison to unorganized sector workers) could be achieved primarily due to this factor.
The issue of social security brings back our attention on the very basic concepts of socio-economic development. What is the development? How to understand the development of a country? The nation is not a map; it is the people who make the nation. The development means the overall development of the people, development in their living standards and cultural standards, development in their knowledge, development of most democratic forms of institutions and the development in the collective concerns of the people for sustainability of the globe and human race. Development cannot be measured by the growth of the concrete buildings, emergence of huge shining cities and growth of transnational corporations. With the growth of economic wealth if there is no comparable development in living standards, educational and cultural standards of the people and democratic institutions in the society, then this cannot be said as positive development, it is rather a negative and distorted development. Therefore, raising the issue of social security is actually questioning the development strategy itself. Now all the developing countries are engaged in a cut throat competition for achieving faster economic growth relying on export oriented model based on foreign investments. But why we need a fast economic development? Is it benefitting the people, is it resolving the problems of the people at the same pace? Who needs the fast economic growth and why? From the perspective of labour and the people at large, we may not advocate or put greater emphasis on fast economic growth. It is but natural that when the wellbeing of the people and overall development of society is a prime concern then the allocation of more and more resources will be directed towards this goal and not for accumulation of wealth and profits. But from the perspective of capital, fast economic growth is of prime concern, for accelerating the rate of capital accumulation. To achieve the fastest rate of economic growth, it is advocated that the state must not interfere in the economic spheres and the wellbeing of the people must be left to the supply and demand magic of the market god, and the CSR of its corporate priests. Therefore the issue of distributive justice and people’s wellbeing loses its space when we accept the logic of fast economic growth. The people are thrown in the conditions of chronic poverty and hunger in the name of their own welfare that is to be brought up by the faster economic growth; and then they themselves are blamed for their conditions and offered some welfare as if showing mercy on them. By propagating and establishing this logic in the society, the capital psychologically weakens the people and makes it appear as if social security is not a right of the people but a charity provided by state and the capital. Therefore it is necessary to understand that social security is a right and oppose all such efforts that make it appear as charity. If we look historically, it was the rise in productivity (by hundreds times) of the workers in 19th century that made it possible to realize the eight hours working day. Obviously it was not granted automatically, large number of workers laid their lives in eight hours working day struggle all over the world and then only the capital was compelled to accept it. Now if we look at the developments from the 20th century to 21st century, the labour productivity has gone up by more than 1000 times. In 1920 steel production needed more than 3 worker-hours per tonne and in 2000 it needed only 0.003 worker hours per tone (Vaclav 2005). Productivity raised by computers only is about 500percent. This extreme high jump in productivity naturally builds a strong argument in favour of reducing the working hours further and providing more space to workers for recreation and their overall social, economic, cultural, educational and political development.
It is in this light the issue of social security for all becomes the prime agenda of the working class movement and the struggle for social security becomes the struggle for a democratic and civilized society.
The Deregulation of Labour and the Deterioration of the Social Security
In a capitalist democracy, the labour laws are nothing but a contract between labour and the capital determined by the balance of power between the two classes in the time and space. This balance of power is also reflected in and interlinked with the nature of politico-economic regime and the degree of neutrality that the state apparently displays in labour-capital relations. If the working class movement emerges powerful and is able to tilt the balance of power in favour of labour, it is able to compel the state to amend labour laws in favour of labour to upgrade the labour standards, or compel the employers by way of collective bargaining to upgrade the labour standards over and above what is provided by existing labour laws. In these situations the state is also compelled to show more neutrality in dealing with labour-capital relations, if not acting in favour of labour. However, the situation is reversed when the balance of power is decisively tilted in favour of capital. In such situations, the capital is able to compel the state to reform the labour relations (labour laws) against labour. Even when labour laws remain the same, practically they lose their meaning and relevance. The state no more appears as a neutral entity, and in collusion with capital it openly acts against labour. This dynamics appears very clearly in various phases of Indian history, particularly when we compare the situations before and after liberalization.
Before liberalization there was no such terminology of formal and informal sectors, or organized and unorganized sectors. Largely the terminology of unorganized labour/workforce was used to define vulnerable sections of workforce. The terminologies of unprotected workforce and small economies were used to define the nature of vulnerabilities of various sections of unorganized workforce. The understanding behind these terminologies clearly conveyed that the vulnerabilities of these sections of the workforce can be removed and it is possible for them to move out of the situations of unorganized labour. Therefore, the vulnerabilities were not considered of permanent kind and so there was no permanent kind of so called unorganized sector. This understanding articulated the situations in a continuous process of transformation and the existence of unorganized labour reflected a phase of transition. The vulnerabilities of unorganized labour were precisely due to the fact that they were not protected and not organized, therefore the approach and strategy was targeted to organize them and extend relevant protections to them. Forms of organizing to increase collective bargaining power and the legislative-policy initiatives to extend protection may be different for different sections of unprotected wage labour and small economies. Therefore, the subsector centered focus was inbuilt in the strategies. For example, in agriculture, a home of major section of unprotected labour and small economies, the dominant discourse was for agrarian transformation with three major aspects in the strategy: a) organizing them to increase their collective bargaining, and to enable them to collectively function as larger economies; b) enacting and enforcing land reform policies, and a central legislation for agriculture labour; and c) extending subsidized inputs and promoting cooperatives. Similar strategies were adopted in some other major sectors, for example, mining, bidi making etc. The struggle for extending protection to unprotected labour in enterprises was reflected in the enactment of contract labour abolition and regulation act. Moreover, the dominant practice of industry level bargaining ensured protection to unprotected workers in industries where smaller enterprises dominated the scene, for example, jute industry, textile industry and plantations etc. There was a strong possibility of gradual disappearance of unorganized labour, if the working class movement was able to achieve its above goals, particularly the implementation of land reforms, enactment of legislation for agriculture labour and extending job security and social security to all workers. However, even if some significant achievements were made in this direction before liberalisation, the structural transformation could not be achieved. Land reforms were not implemented, legislation for agriculture labour was not enacted, and the legislations that were enacted to protect labour left large sections of the workforce out of its coverage and so on. The factors behind the failure of labour and political movements were mainly the three: a) lack of unity among various political forces, and further divisions in the movement in 1970s and 1980s, b) the Indian economy entered in a prolonged stagnation and systemic crisis in 1970s and the increasing problems of unemployment reversed the wheels of transformation and aggravated the problems of unorganized labour further, and c) increasing urbanization combined with jobless growth led to expansion of unorganized sectors alarmingly, for example, in construction, mining, street vending and waste collection and disposal etc.
The liberalization came with a completely new dynamics. On the one hand, the social and political forces working for transformation of society and political economy of country were weakened largely due to: a) downfall of the international socialist and democratic movements and emergence of largely a uni-polar world from the working class perspective, b) downfall and disastrous divisions in the working class movements leading to virtually its disintegration, c) co-option of a large section of people’s movements by national and international capital by helping and promoting them and building or forcing a consent to work as a ‘responsible’ opposition within the framework of new global political economy, c) a consensus built or forced among almost all parliamentary parties, from right to left, on anti-labour economic policies largely on the ground of TINA (there is no alternative); and therefore a large section of working class movement that was associated with these parties was virtually paralyzed, d) the new global political economy and new international division of labour transformed the state virtually in to a corporate agent, and e) new system of production and distribution based of global value chains led to divisions and scattering of the working classes and thereby drastically reduced their collective strength and collective bargaining power. On the other hand, in the new global political economy based on new international division of labour, the unorganized labour emerged as an important source of profit maximization. Global value chains of various industries are established in such a way that almost all labour intensive production activities are shifted to developing countries that are typically locked in low organic composition of capital and the cost of production including the wages are very low. Further profit maximization depends on two factors: a) the unorganized labour in the developing countries largely acts as reserve army of labour and consistently puts a downward pressure on wages and reduces the collective bargaining power of labour; and therefore, larger the size of this reserve army of labour, lower is the share of wages and greater is the share of profits in total value, and b) the cost of production is reduced drastically by integrating the increasing sections of unorganized labour (particularly the small and tiny enterprises, self employed producers/service providers and home based workers) in the global value chains; and therefore, larger the proportion of unorganized labour in the value chain, greater is the share of profit in total value. In these situations the foreign investments move (i.e. industries from developed countries are shifted) to those developing countries having greater reserve army of labour in the form of unorganized labour (and so the wages are one of the lowest), provided that the cost of other factors is more or less equal. The cost of other factors include the infrastructure costs of production (costs of power and raw materials, the cost transportation of raw materials, parts and components within the value chain networks, and administrative costs) and infrastructure costs of distribution (costs of transportation of products to the markets). Therefore these factors relate to the existence of competent subcontracting industries in the country and in the region, liberalization of economy and regional integration of economies and the existence of significant size of national and regional market. In these situations, with an imposed model of export oriented growth, the developing countries, in order to attract sufficient FDI and to get sufficient export orders, are compelled to compete with each other to offer better prospects of profit maximization for the capital. The winners in this competition are those countries that are able to effectively reduce the share of wages to the minimum by ‘disciplining’ labour and ensuring a significant supply of unprotected labour.
It is in this background, the whole dynamics of discourse on the issues of unprotected labour and small economies took a new turn in the phase of liberalization. The focus decisively shifted from transforming the conditions of the unprotected labour and small economies to maintaining them at bare minimum levels of subsistence. Therefore, it was consciously and purposefully accepted and we were made to accept that unprotected labour and small economies may not disappear and remain forever. Defining and treating them as a specific sector served well the above purpose and the intensions. It does not appear just a coincidence that ILO ‘discovered’ the dynamics of so called informal sector (in 1972 in Kenya) and started promoting a completely new strategy for this sector based on divide between formal and informal sector (the report on “Dilemma of the Informal Sector” presented in International Labour Conference in 1987) in the same period during which the new international division of labour was taking shape.
However, it is worth mentioning that within the working class movement the dominant discourse on transforming the conditions of unprotected labour and small economies was still based on subsector approach. For example, there was a strong movement for a legislation and welfare board for construction workers to regulate the working conditions and to extend social security to unorganized construction workers. The enactment of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 and Building & Other Construction Workers’ Welfare Cess Act, 1996 reflected a great victory of the workers movement. These legislations included extensive provisions for regulation of working conditions, occupational health and safety of construction workers and also for establishment of construction workers welfare boards in all states to provide social security benefits to the workers. The welfare boards are funded by levying one percent cess on all investments in construction business. This legislation greatly accelerated the process of organizing the construction workers and also created a better space for collective bargaining.
The period of 14th Loksabha when UPA coalition government was formed in 2004 in the leadership of congress party and supported by the left parties, was largely a period of transition when we witness the dynamics of continuity as well as change. Largely under the pressure of left the sub sector centered approach for transforming the unprotected labour and small economies to some extent continued, but there were also decisive moves towards institutionalizing the duality of labour as well as towards anti-worker labour reforms. This was reflected in the common minimum program of UPA government in 2004. The national rural employment guarantee act was enacted in 2005, and this was probably the only great achievement of left as part of coalition government. This act ensures 100 days of employment to one member of rural families. In a situation when employment in agriculture has become only seasonal, and large majority of land holdings are at below subsistence level, this law is meant to ensure survival of agriculture workers. The other achievement was the establishment of National Commission on Enterprises in Unorganized Sector (NCEUS) in 2004 that for the first time produced extensive and valuable reports exploring the problems of various sections of unprotected labour and proposed policy initiatives. However, during the same UPA government, two major anti-labour initiatives were taken. The new pension scheme formulated in 2003 by Bhartiya Janata Party led NDA government was implemented by UPA government in 2004, despite strong protest from trade unions and some state governments. On the other hand initiatives were taken to legislate the separate social security act for unorganized workers that was a decisive move towards institutionalizing the duality of labour.
The New Pension scheme was initially implemented in central government and railways, and later it was extended to all sectors including the informal sector workers. The earlier pension scheme was based on providing defined benefits and it was replaced by this new pension scheme based on defined contributions but no defined benefits. In the new pension scheme the contributions of employees and employers are transferred to a trustee bank that invests it in share and bond markets, and therefore the benefits for the workers depend on the rise and fall of share markets. In the earlier pension schemes there was a provision of guaranteed pension amount, including a family pension, gratuity, and disability pension. But in the new scheme all these benefits are lost, and there is even no guarantee of the principal amount invested by the workers. Informal workers are also covered under this scheme and they are required to contribute a minimum of Rs 1,000 per year. Their money will also be similarly invested in the share markets and they will get the benefits and pension in the same manner as discussed above. The pension fund is effectively privatized and 26 percent foreign partner holdings are allowed. Pension scheme is regulated by a government agency named PERDA (pension fund regulatory and development authority) and insurers are given option to choose insurance agencies to manage their pension fund, including ICICI prudential fund, IDFC pension fund, Kotak Mahindra pension fund, Reliance capital pension fund, SBI pension fund, UTI retirement solution and Annuity service provider. Therefore, the new pension scheme provides no guaranteed amount of pension to workers, and on the other hand, the huge pension fund is handed over to private national and foreign companies to generate profits. It is clear that the new pension scheme is nothing but a decisive step to promote privatization and financialization of accumulation, offering a huge opportunity to national and international capital for generating profit out of public money.
The Unorganized Workers Social Security act was enacted in 2008. This act came as a total disappointment for workers because it practically added almost no social security benefits and provided only for applicability of already existing 10 central welfare schemes (providing nominal monetary benefits) in certain sectors to all unorganized workers. Moreover, the act also states that it may be applicable to only those workers earning below certain limits (ceiling of monthly salary/earning or size of landholding) to be decided by the state governments and therefore it may not be applicable to all unorganized workers. Most importantly, the act does not mention the source of funding for its implementation. It is interesting to note that the employers are kept out from any financial liabilities, but they are ensured representation in the board. Implementation of the act is left to the state governments. The only scheme under the act for which the process is said to have started for implementation in few states is Rastriya Swasthya Bima Yojana (RSBY)-a national health insurance scheme. For example, the labour department of Delhi government has specifically asked urban local bodies to provide the list of riksha pullars, auto-taxi drivers, porters, street vendors, domestic workers and waste collectors for enlisting them under this scheme. However, the urban local bodies are hesitant to list most of these workers, because if they are listed in this scheme, then they may also legally become the residents of Delhi and therefore may also claim for other benefits like BPL (below poverty line) cards and benefits and housing facilities etc. Under this scheme, the workers are required to pay a premium of Rs 30 per year to a private insurance company. The company will issue them a card and they will be able to get free treatment of up to Rs 30000 for themselves and other 4 family members in any hospital listed by the company. However, this scheme is unable to attract the workers, because as in case of all such medical insurances, there are so many ‘ifs and buts’ for availing the medical facilities, for example, insured person can avail this benefit only when he/she is admitted in a hospital. Moreover, the listed hospitals are interested only in eating the insured amount. Recently, the Modi government declared to club three schemes-Rashtriya Swastha Bima Yojana (RSBY), Aam Aadmi Bima Yojan (AABY) and Indira Gandhi National Old Age Pension Scheme (IGNOAPS) and suggested to issue one single smart card to workers for implementation of these schemes on pilot basis in 20 districts. However, ambiguity on its financing and coverage still continues. On the other hand, if we read the meaning of these initiatives with the National health policy 2002 and the recent 12th five year plan document then a completely new dimension is exposed. National health policy 2002 clearly proposes for privatization of health care, and the new plan document provides a clear cut system and plan to implement it. The planning commission in this 12th plan document proposes only to keep non-profit health care works like immunization, anti-natal care and health education in the public sector and all other health care that provide prospects for profit making may be handed over to the private sector. The overemphasis of the government on health insurance schemes is a decisive move towards privatization of health care. In all such schemes the private health care providers may play a prominent role and they would be reimbursed by the government. This is a highly retrogressive step in a country with a large (although still insufficient and inefficient) network of public health system and that played a major role in insuring health services to urban poor and rural population in general. Now rather than improving and developing a better public health system with enhanced health budget, the state is handing over the whole health care system to private institutions. Rashtriya Swasthya Bhima Yojana is actually being used as a medium to hand over public funds to the private sector through an insurance route. It is also interesting to note that the Maharashtra government in 2012 floated proposals to privatize radiology services in 14 Government Medical College hospitals and all district hospitals across Maharashtra. The state has also been planning to hand over huge sums of public money to insurance companies and large private hospitals through a Private-Public Partnership (PPP). This involves large scale public finances being given to corporate hospitals without any standardization or regulation of the services, and no protection of patients’ rights. There are also attempts to privatize the Employees State Insurance that is the life line of industrial workers. The minister of state for Labour and Haj in Karnataka clearly declared in 2005 that the State Government was seriously considering a proposal to privatize 128 dispensaries and nine hospitals on the ground that a task force found the medical centers run under the Employees’ State Insurance (ESI) scheme inadequately equipped. All these policy initiatives are targeted to promote privatization and financialization of accumulation at the cost of public health.
The unorganized workers social security act 2008 and the national pension scheme 2004 were two major anti-worker labour reforms done without naming them as labour reforms. They decisively institutionalized the duality of labour, and provided a justification for informalisation of labour in organized sectors, because they were made applicable to informal workers in organized sectors as well. Most importantly, these policy initiatives decisively established the dominance of profit over people through promoting privatization of social security and financialization of accumulation by handing over huge social security funds to private corporations.
Let us see how the unorganized workers social security act was a step moving backwards in terms of extending social security coverage to unorganized labour, rather than moving forward. In the federal structure of Indian state, both central government and state governments have powers to legislate on labour, and moreover, the strength and collective bargaining power of labour movement varies from state to state. Therefore, national picture of labour relations dynamics based only on central legislations and schemes are many times misleading. A clear picture emerges only when we look at the dynamics of labour relations and labour movements in states. In the present context, it is worth mentioning that in various states effective initiatives emerged for transforming the conditions of unorganized labour before liberalization or in its early phases. The initiatives in three states-Kerala, Tamil Nadu and Maharashtra are particularly exemplary and clearly show the direction towards which the labour movement was moving in various states to address the problems of unorganized labour.
The Kerala was a pioneering state in designing and implementing legislations and policies directed towards transformation of conditions of unorganized labour. We have already discussed that the Kerala is one of the two states (other is Tripura) where legislation for agriculture workers was enacted, and moreover, this is one of three states where land reforms are implemented in a better way (other two states are West Bengal and Jammu and Kashmir). The Kerala State has set up more than 20 welfare funds/boards for various sections of unorganized labour including abkari/toddy workers, head load workers, agricultural workers, handloom workers, auto-rickshaw workers, cashew workers, coir workers, construction workers, motor transport workers, some artisans and others. The boards are statutory bodies and provide a wide range of benefits including old-age benefit, medical care, education for children, assistance for marriage, housing etc to the workers. The boards are autonomous and financed by contributions from employers, workers and the government. Later, an apex body was set up through the Kerala State Labour Authority Ordinance, largely to coordinate, regulate, streamline, monitor and control the activities of the Labour Welfare Schemes, Boards and the Government.
In Maharashtra, a state level board-the Maharashtra Labour Welfare Board (MLWB) was constituted as a statutory body under the Bombay Labour Welfare and Fund Act, 1953 for promotion of welfare of labour and their dependants. All factories coming under the Factories Act, 1948, all shops and establishments within the meaning of the Bombay Shops and Establishments Act, 1948 employing 5 or more persons, and all motor transport undertakings coming under the Motor Transport Workers’ Act, 1961, are covered under the act. The financing of the boards is based on six monthly tripartite contributions from workers, employers and government along with the fines realized and unpaid dues of the employees collected from various factories and establishments. All the establishments covered under the act are required to pay employees’ and employers’ contributions to the Labour Welfare Funds at prescribed rates, in respect of their all employees, as on 30 June and 31 December every year. However, as clear from its applicability, a large section of unorganized workers are still not covered under the act. The objective was to gradually include other sections of unorganized workers. Enactment of Mathadi, Hamal and Other Manual Workers (Regulation of Employment and Welfare) Act, 1969 and constitution of Mathadi Tripartite Board was an exemplary initiative in this direction.
The Tamilnadu started with a state level board and then separate funds/boards for various occupations were constituted under it. Tamil Nadu Manual Workers (Regulation of Employment and Conditions of Work) Act was enacted in 1982 and currently about 55 employments are covered under it. Domestic workers are also covered under it. It also includes occupations with very small size of workforce like cycle repairs. The Tamil Nadu Manual Workers Social Security and Welfare Scheme for unorganized workers was implemented in 1999 and a state level Tamil Nadu Manual Workers Social Security and Welfare board was established. Wide variety of social security benefits are extended by the boards to workers including Group Personal Accident Relief Scheme, Maternity Benefit Scheme, and Terminal Benefit Scheme. The Board is tripartite and kept flexible to add more occupations, and new schemes or benefits. Currently 60 employments are covered under it. Financing of the welfare board is based on contributions from employers, workers and the government. Currently the Board runs 52 Labour Welfare Centres and 71 Tailoring Centres throughout the State. Each Labour Welfare Centre consists of a Tailoring Class for women dependants of workers and a childcare centre. Tailoring classes are conducted for the wives and unmarried daughters of the workers. The training period is for one year, and stipend is provided to every trainee. The Board also pays their examination fees. In the childcare section, free primary school education is provided to the children, apart from providing nutritious midday meals, milk, eggs, fruits and medical care, etc. Qualified doctors medically examine these children twice a month. Two sets of uniforms are also supplied to the children each year. The Tamil Nadu Manual Workers (Construction Workers) Welfare Scheme was initiated in 1994 and welfare board was established well before the enactment of the central act on construction workers.
In all the three states the legislations and the social security and welfare boards has three common features: a) clear financing mechanism and provision for tripartite contributions and tripartite management of boards, b) subsector centered focus, c) varying degree of focus on regulating working conditions along with extending social security benefits. The cumulative impact of this dynamics also helped in increasing collectivity and collective bargaining power of workers in varying degrees in various sectors and various states. To explain it more clearly we may cite the examples of The Kerala Fishermen Welfare Board and Maharashtra Mathadi, Hamal and Other Manual Workers welfare board.
The Kerala Fishermen Welfare Fund Board was established in 1986 under Kerala Fishermen Welfare Fund Act 1985. The Board has three regional executives and 54 Fisheries Officers who look after 235 fisheries villages. The fish-worker has to contribute Rs. 30 per year for initial three years, and then 3% of the price of his/her catch or of his/her wages or earnings. The trader has to contribute 1% of the annual turnover or an amount fixed by the Board. The owner of the fishing vessel, owner of the fishing net, and prawn and pisciculture owners have also to contribute to the Fund. The Board runs 15 schemes and provides a much wider range of benefits than those included in the ILO Convention on Minimum Standards of Social Security. The benefits also include payment for injury in any accident sustained while fishing, lump sum assistance for funeral expenses, interest-free loans for the marriage of daughters, educational assistance, and medical facilities, along with others. The tripartite dynamics of the board is such that on the one hand, it helps the workers to organize themselves for their collective interests, and on the other hand also indicates the responsibility of employers. This dynamics also increases the collective bargaining power of labour.
The case of Maharashtra Mathadi, Hamal and Other Manual Workers welfare board is far more interesting. In Maharashtra in 1950s and 1960s strategy of forming tripartite bodies was adopted to realize a decasualization impact for dockworkers and badali (replacement) workers in textile mills. These tripartite bodies/boards evolved a method to extend basic protective social security to unorganized workers by regularizing their intermittently available work and developing employer-employee relationships. The tripartite bodies extended a statutory right to unorganized dock workers and badali workers in textile mills for an attendance allowance of 50% of daily wages, weekly off, one-day holiday wage, and 12 days’ minimum guaranteed wages per month. In 1969, under the Maharashtra Mathadi, Hamal and Other Manual Workers (Regulation of Employment and Welfare) Act the Mathadi Tripartite Board was constituted on the same lines. Currently there are around 50,000 registered employers with almost 1.5 lakh workers registered under 30 different boards in Maharashtra. The board includes a chairperson in each board appointed by the Government of Maharashtra and equal number of representatives from the unions and the employers’ association. Along with providing health facilities and social security, the boards also give importance to housing for the workers and education for their children. Scholarships are also initiated for the children of mathadi workers. Mathadi Boards regulate the labour market by bringing all the workers into an organized set-up. The entry of new, employable workers is linked with a process of regularization of existing workers. Young blood is brought into such organized structures through a process of recruitment, and age based superannuation. This dynamics increases the collectivity and collective bargaining power of workers significantly.
This is not the case that these sub sector centered boards were perfect in all respects. There were problems and in many cases they were also facing the financial constraints. But by and large this strategy proved effective in extending protection to unorganized labour in the relevant sub sectors. It is also to be noted that the state level initiatives discussed above, and the central initiatives such as welfare boards for bidi workers, construction workers and mine workers etc, targeted only those workers that were not covered under the major labour acts like factories act, and inherently supported that the strategy for transforming the conditions of informal workers in formal sectors is to be focused on regularization of those workers. It was expected by trade unions and workers that the initiative for a central legislation on social security for unorganized workers may develop a model based on the best practices and positive aspects in all the above models. This was the right choice for transforming the conditions of unorganized labour and small economies across the nation. However, the unorganized workers social security act 2008 came as a complete disappointment for workers and trade unions.
Due to strong protest from trade unions, the state was not able to do any major amendment in labour laws, except the trade union act which was amended in 2002 and membership of 10 percent of workers or 100 workers (and at any case not less than 7 members) was made mandatory for registration of trade unions. It was a major attack on right to organize and collective bargaining. In given anti-union environment, requirement of large number of workers as members for registration of a union made the unionization highly difficult. However, the state increasingly enforced a liberal labour regime by way of allowing violation of labour laws, paralyzing the inspection machinery for labour laws, allowing self certification under various labour laws, allowing large scale informalisation of workforce in formal sectors, discouraging registration of trade unions, declaring more and more sectors as public utility services where legal strikes are almost impossible, frequently imposing Essential Services Maintenance Act (ESMA) to ban the strikes, establishing large number of special economic zones and granting them exemptions under various labour laws, and judicial pronouncements virtually changing the meaning of labour laws.
The new government formed in 2014 came out with a new political dynamics and decisively moved to complete the task of unfinished economic reforms and labour reforms with completely corporate perspective. The major expectations of the corporate from the current government include amendments in labour laws, implementation of national manufacturing policy, wholesale privatization of public services (including health, water, sanitation, and transport including the railways etc) and complete deregulation of financial sector. The implementation of new manufacturing policy in itself means bringing out and implementing two anti-worker policies: a) a policy that facilitates large scale land acquisitions for establishment of huge manufacturing zones and parks, with minimum opposition, b) pro-capital labour relations insuring cheaper labour costs and silencing the labour, and c) accelerating the process of regional integration in south asia that facilitates emergence of regional value chain networks similar to that in east and south east Asia. The government is moving very fast to accomplish the above tasks. It is interesting to see that the amendments in labour laws were first initiated by the Rajasthan state government at state level (ruled by a political party-BJP that also rules the central government) and after testing the level of resistance the similar amendments were initiated by the central government at national level. On the issue of land acquisition also the initiative is taken by the state government of Rajasthan. Probably in order to avoid large scale discontent at national level, the Modi government is following a state centered strategy. The national government may encourage and facilitate the legislations at state level, initially in the states ruled by BJP and then a competition among various states for winning the investments may ultimately insure similar policies in non-BJP ruled states as well. It is worth mentioning that the land acquisition amendment bill proposed by the state government of Rajasthan is a step backward from that enacted by the central government after upsurge of country wide peasant unrest against the land acquisitions. There were still serious problems in the said central legislation but it was clearly a move to replace the colonial land acquisition act. The Rajasthan land acquisition bill in many regards is bringing back the colonial land acquisition act.
The labour law amendments proposed by the Rajasthan government and the central government may decisively transform the country in to a new global factory with ‘better sweatshop’ conditions than in China or Indonesia. If the government is able to do these amendments in labour laws then almost whole Indian workforce may be practically informalized by: a) effectively shifting the enterprises with less than 50 workers to informal sector, as the contract labour abolition and regulation act and section 25FFA of ID act (requirement of permission for closure) will not apply to them, moreover, enterprises up to 40 workers would not bother about labour laws as they will be exempted from furnishing returns under labour laws, and the factories act will not be applicable to establishments up to 20 workers with power and 40 workers without power; and b) informalization of workforce in enterprises with less than 300 workers (very few enterprises engage more than 300 workers), as the protective provisions of ID act (related to retrenchment, layoff and closure) will not apply to them, and they will be permitted to engage huge proportion of workers as apprentices. This system will offer huge super profits to the employers by providing a huge space to engage vulnerable and cheap labour in the form of contract workers and apprentices, and over and above all this, they may also be able to save almost half of the wage bill by virtue of a provision for government bearing half of the cost of stipend to apprentices.
All the above developments have decisively deteriorated the existing social security system in India. If has effectively reversed the developments that were moving (although very slowly and inefficiently) towards expansion and betterment of social security system and turned the wheals towards establishing a system wherein the whole workforce is increasingly being transformed in to a reserve army of labour maintained at bare minimum level of subsistence and compelled to be always ready to perish in the profit machine in a slave labour like conditions.
The structure of the workforce and the Social Security Challenge
The population in India increased from 846 million in 1991 to 1028 million in 2001 and to 1210 million in 2011. The size of labour force (those in labour market employed plus unemployed) in India increased from 468 million in 2004-05 to 469 million in 2009-10 and 475 million in 2011 to 484 million in 2012. Total workforce (employed part of labour force) or total employment in India increased from 397 million in 1999-2000 to 458 million in 2004-05 and 459 million in 2009-10 to estimated 473 million in 2011-12. It is also interesting to note that almost all incremental employment during from1999-00 to 2004-05 was of informal kind. During this period the formal sector the employment increased only by 8.5 million (from 54.1 million to 62.6 million). The rest of incremental employment was in informal sector. Moreover, even in the formal sector there was no increase or even a decline in the formal employment, all incremental employment was of casual/contractual nature. It simply reflects on the informalisation of the formal sector, and expansion of informal sector. Out of the total employment (principal plus subsidiary) of 458 million (2004-05) the unorganized/informal sector accounted for 395 million, i.e., 86 percent of the workforce; and unorganized/informal workers (informal sector workers plus informal workers in formal sector) accounted for 423 million, i.e., 92.3 percent of the workforce. In agriculture sector almost 100 percent workers represented unorganized sector and in non-agriculture sector about 72 percent of the workforce was in unorganized sector. The proportion of informal sector workers in non-agriculture recorded an increase of 4 percentage points (in 2004-05) from 1999-2000 when it was at 68 per cent. We observe a similar trend in later periods as well. (Papola&Sahu 2012, GOI 2011, NCEUS 2007)
Organized or formal sector (all public and private enterprises employing 10 or more workers) accounted for only about 14 per cent of total employment in 1999-2000 as well as in 2004-05. The proportion of formal sector slightly increased to 16 per cent in 2009-10, however, 84 per cent of workers were still in the so called informal sector, with no job security or social security. Moreover, over half of the formal sector workers are informalized and represent the category of casual/contract workers, with no job security and practically no social security. Therefore, in general picture, the informal workers (informal sector workers plus informal workers in formal sector) constitute about 92 per cent of the total workforce. The proportion of informal (casual/contract) workers in the formal sector is continuously rising. In 1999-2000 informal workers constituted 42 percent of the formal sector workforce, their proportion increased to 47 percent in 2004-05 and as high as 51 percent in 2009-10. (Papola&Sahu 2012, Kannan, 2011)
If we disaggregate the above picture in subsectors of occupations, out of total 395 million informal sector workers, agriculture alone accounted for 253 million (64 percent) and non-agriculture sectors collectively accounted for 142 million (36 percent). This reflects clearly that the agriculture continued to be the home of majority of unprotected workers and vulnerable small economies. The proportion of informal sector workers in non agriculture increased from 32 percent in 1999-2000 to 36 percent in 2004-05. This reflects on expansion of urban informal sector due to: a) rising unemployment b) rapid and unplanned urbanization accompanied with rapid expansion of market creating a place of refuge for unemployed in the form of street vending, scrap collection, and various kinds of other services etc, c) large scale transfer of jobs from formal to informal sectors by way of expanding the industrial value chains (outsourcing labour intensive manufacturing tasks) to tiny and home based units and to home based workers as a strategy of saving labour cost by exploiting cheap labour. (NCEUS 2007)
If we disaggregate the data further, then we find that the wage workers constituted about 43.5 percent of the total workforce, and the self employed workers represented the rest of the 56.5 percent workers. In agriculture, self employed workers constitute as high as 64.2 percent of the workforce and the wage workers account for only 35.8 percent of total workers. In non agriculture sector the wage workers constitute 53.6 percent of the workforce and it is interesting to note that in this sector as well as the self employed workers account for as high as 46.4 percent of the workforce. In totality, in the so called informal sector, 36 percent are wage workers and 56 percent are self employed workers. (NCEUS 2007)
If we disaggregate the data on wage workers, then we find that in agriculture almost all wage workers are unprotected casual workers. In non-agriculture unorganized sectors regular wage workers constitute only about 17 percent of the workforce and the casual wage workers account for about 20 percent (and the rest about 63 percent are self employed). It is interesting to note that in non-agriculture organized sector also the casual workers constitute more than 23 percent of the workforce, the regular wage workers constitute only 69 percent (the rest 8 percent are said to be self employed). (NCEUS 2007)
The women workers constitute about 33 percent of the workforce (148 million out of total 458 million) in India. Agriculture and allied sectors are still the home of women workers, and about 73 percent women workers (107 million) are engaged in this sector. In non agriculture sectors also the women are highly concentrated in unorganized sectors. Only about 4 percent women workers (6 million) are employed as formal workers with social security benefits, while 9 percent male workers are engaged as formal workers. If take in to account both casual and regular workers in formal sector, then about 27 percent of female workers and 29 percent of male workers were engaged in formal sector. In non agriculture sector the women workers are more concentrated in self employed activities and about 53 percent of them work as own account workers, 46.3 percent as unpaid family workers and only 0.6 percent as employers. The majority of SC and ST workers in the non agriculture sector are engaged as casual workers. Muslims are overwhelmingly concentrated in the unorganized sector in self-employed activities. The upper caste Hindus have better access to quality employment and productive self-employed activities due to their better access to education and land ownership. (NCEUS 2009)
It is claimed that the incidence of child labour has decreased and reported to be only 3.4 percent. However, this data seems to be misleading, and the real picture emerges in the data on out of school children which stand at 17.9 percent.
In totality, out of total workforce of 456 million agriculture accounts for 258 million (56.5%) with 252 million informal sector workers (98%) and a total of 255 million (99%) informal workers (about 3 million formal workers and 6 million formal sector workers); Industry sector accounts for 85 million (18.7% of workforce) with 60 million informal sector workers (70%) and a total of 76 million (89%) informal workers (25 million or 30% formal sector workers and 9 million or 11% formal workers); and services accounts for 113 million (24.7%) with 82 million informal sector workers (73%) and a total of 90 million (80%) informal workers (31 million or 27% formal sector workers and 23 million or 20% formal workers). It is also to be noted that from 1999-2000 to 2004-05, the percentage of workers in agriculture decreased from 60 percent to 57 percent, while in services it increased from 23.7 percent to 24.7 percent and in industry increased from 16.3 percent to 18.7 percent. This is also interesting to note that in the same period the percentage of formal sector workers decreased from 31.4 percent to 30 percent in industry and from 31 percent to 27 percent in services and formal workers decreased from 13.49 percent to 11 percent in industry and from 24 percent to 20 percent in services. In totality, the enterprises with only one worker constituted as high as 64.33 percent of all enterprises and 35.06 percent of all workers including formal and informal sectors, those with 2-5 workers constituted 32.27 percent of enterprises and 43.33 percent of all workers, those with 6-9 workers constituted 2.13 percent of enterprises and 8.18 percent of all workers, those with 10-19 workers constituted 0.92 percent of enterprises and 6.35 percent of all workers, and those with more than 20 workers constituted only 0.35 percent of all enterprises and 7.08 percent of all workers. About 74.1 percent of the wage workers in non agriculture (both formal and informal sector) are engaged without any formal contract. In informal non agriculture sector wage work is almost completely informal in nature and as high as 95.9 percent wage workers are engaged without any formal contract. In formal non-agriculture sector about 53.2 percent wage workers are engaged without any formal contract. About 79 percent of those workers who are engaged regularly and nature of their work is of regular kind, are also engaged without any formal contract. (NCEUS 2007&2009)
This above dynamics reflects on informalisation of formal sectors by transferring the jobs from formal to informal sectors and by informalization (casualisation/contractualisation) of formal sector workers. This is reflected in large scale outsourcing of specific labour intensive manufacturing tasks by larger factories to small scale industries and home based workers and engagement of large proportion of workers as casual/contract workers. In India, about 32 percent of enterprises in the unorganized sector operate under direct contract with larger enterprises, i.e., under a system of subcontracting. Many more enterprises may also be operating under indirect and non-formal subcontracting arrangements. (NCEUS 2009)
It is clear from the above that there is a broad commonality in the vulnerabilities of various sections of workers and that relates to the crisis of the sustainability of their livelihoods and deteriorating and unstable incomes. But with in broader commonality, the nature of vulnerabilities is different in different occupations. For example, the nature of vulnerabilities of self employed producers linked with the value chains of industries, self employed producers producing for subsistence, self-employed own account workers in various services, self employed service workers linked with the value chains of industries, home based workers linked with the value chains of industries, casual/contract wage workers in formal and informal sectors and regular wage workers etc may be different and may need occupation specific social security initiatives that may increase the sustainability of their livelihoods and help them move out of vulnerabilities. Within a broader commonality, the nature of contingencies may also be different for various sections of workers.
It is also clear that the self employed workers form the huge majority of the workforce and unprotected casual/contract workers form the huge majority of wage workers. In such situations, a social security system may be effectively reduce the vulnerabilities of the workers only when it focuses on helping the self employed workers to make their livelihoods sustainable and effectively regulates the working conditions and creates the effective space of collective bargaining for casual/contract workers.
Initiatives Needed to Expand the Effective Coverage of Social Security
The initiatives to expand the effective coverage of social security has two elements: a) Institutionalization of a social security system based on right of all the citizens for a minimum standards of living conditions considering all the requirements of life and opportunities for an overall development of the personality, and a security cover for the contingencies, and b) Insuring redistributive justice by way of increasing the collectivity among workers and insuring an effective space for collective bargaining. If these two elements are not inbuilt in the social security system, it becomes a charity, and it is largely targeted to maintain the workforce at bare minimum levels of subsistence rather than helping them out to move out of vulnerabilities.
A. Social Security System Insuring Minimum Life Standards and Addressing Contingencies
1. Basic social security
The basic social security must include the following aspects:
a) Right to sustainable livelihood and incomes at least equal to minimum wages as legally enforceable right to all
b) Unemployment compensation as legally enforceable right to all unemployed youth, and workers facing long term/seasonal unemployment
c) Subsidized education, health &sanitation, drinking water and housing facilities to all
d) Food Security to all (subsidized food items throw Public Distribution system)
e) Ecological Security to all, by way of maintaining the ecosystems and prohibiting any activity disturbing it, to protect the people from eco-disasters
f) Subsidized inputs to small and marginal farmers; and also to other self employed producers
g) Old age pension (equal to that part of minimum wages, including basic wages, dearness allowance, housing rent + free travel and free health care) to all who do not retire with a pension benefit
h) Disability pension (equal to the part of minimum wages, including basic wages, dearness allowance, housing rent and maternity benefits + free travel with one assistant, and free health care) to all disabled persons who are unable to work
i) Maternity benefits to all women
2. Contingent Social Security
The contingent social security must include following aspects:
a) Compensation for unemployment created by dismissal/retrenchment/layoff or closure of industries: Compensation equal to six months’ salary to be paid by the employers and thereafter if the unemployment continues for more than six months then unemployment compensation needs to be paid under basic social security
b) Employment injury compensation: Total wages for whole period when workers is unable to work, and treatment cost +compensation for any minor or major disabilities created by the injury
c) Death or major disability of workers: Disability pension or alternative livelihood to survivor + compensation and free education and health cover to the family
d) Livelihood destruction and displacement: Decent alternative livelihood ensuring comparable income + rehabilitation along with compensation
e) Loss of income or increase in expenses (environmental crisis/accidents/crop failure/inflation etc): Enough support to compensate for the losses and to regenerate their livelihood security
To effectively implement this social security system following initiatives are needed:
i) A new labour legislation system needs to be instituted with five labour laws-Labour Relations law, Working Conditions Law, Wage (determination, increment and payment) Law, Social Security Law and Welfare Cess Law. These laws must be simple and with universal applicability of their provisions in all occupations and to all workers without any exception. There may be differences in how and in what form various provisions can be implemented in various industries, for example, if there is only one female worker in a factory, on this ground it cannot be argued that the provision of crech cannot be applicable to such factory, there may not be in-house crech facility, but the employer must be liable to pay to the women in need the real expenses of putting the child in a day care. Another example may be of canteen and subsidized food, if there is only one workers with an employer, it cannot be argued that this provision may not apply, there may not be in-house canteen facility, but the employer must provide subsidized food and drinking water to the worker and a safe and clean space for dining. No exemptions and no self certifications under labour laws may be allowed in any case. Formal employer-employee relationship must be ensured to all wage workers except casual workers engaged for up to 5 days a month. If any worker is engaged by any employer for more than 5 days in a month, there must be a formal employment relationship and engaging workers without a formal contract must be considered a crime inviting severe punishments. The labour relations law needs an explicit direction that the proportion of regular workers can never be less than 90 percent of workers. Engaging workers through contractors or agencies may be completely prohibited. Temporary workers (who may never form more than 15 percent of the workforce may be engaged with short term contracts of 3 months to a year, or project based contracts, and as casual workers engaged not more than 8 hours in a week and 5 days in a month. Apprentices must be considered as workers with short term contracts for all practical purposes and must be extended all social security and labour rights including right to association and collective bargaining. There must be compulsory provision for a severance payment equal to one month’s wages to all workers engaged with short term contracts including apprentices, if they are not absorbed as regular workers and thrown out after expiry of their contracts. The labour relations law must also include a section on outsourcing and responsibility of insuring labour standards across the value chains, with clear provisions for: a) Brands or other Ist and IInd tier customer companies must make yearly contracts with supplier companies (rather than only order based contracts), and the cost of total orders in a year must include (apart from the cost of other factors and profit margins of suppliers) total cost of wages, social security contributions, cost of occupational health and safety, layoff wages and severance payment to workers if the orders are discontinued after a year (in case the supplier company is working for multiple brands and other customer companies then the above total cost may be distributed among them accordingly). The law must clearly state that the brands and other customer companies, whether national or foreign, are equally responsible for ensuring compliance of labour standards across their value chain and share its costs, and in case of any violations reported in their value chains the brands may be made equally responsible and punished. These initiatives may make it feasible to engage 90 percent of workforce as regular workers in those industries as well where the work orders keep on drastically fluctuating. This law may remove the vulnerabilities of the supplier companies as well as the workers engaged in them. Moreover, this will end the space for excuses by suppliers for non compliance of labour standards and for engaging large number of unreported workers and actually robbing their life. In overall terms this will increase the collectivity and collective bargaining power of workers in particular industries. Home based workers working for companies may be treated as wage labour for all practical purposes and must be part of industry wide collective bargaining in particular industries. The labour relations law must contain a provision for compulsory collective bargaining at industry and/or unit/company level, and for an automatics registration of a trade union after filing an online application. There may be a provision that registrar of trade unions may challenge and file a case for cancellation of registration if he/she finds some problems in the application. The problem of multiplicity of trade unions may be resolved by a compulsory provision and clear procedures for election of a collective bargaining union and collective bargaining councils. The problem of weakness of unions in small and medium sized industries may be resolved by a compulsory industry wide collective bargaining. There must be no limit of size of industries for applicability of industry wide bargaining. The wage law must contain clear criteria for determination of minimum wages, annual increments and mode of payment and this must be same and apply to all wage workers and home based workers, without any exception. This must be made mandatory to provide a proper wage slip to all workers showing all payments made in a month including the overtime wages (except casual workers engaged for not more than 8 hours in a week and 5 days in a month). The current criteria on minimum wage determinations includes: i) 3 consumption units for one earner, ii) Minimum food requirements of 2700 calories per average Indian adult, iii) Clothing requirements of 72 yards per annum per family, iv) Rent corresponding to the minimum area provided for under Government’s Industrial Housing Scheme, v) Fuel, lighting and other miscellaneous items of expenditure to constitute 20% of the total Minimum Wages, vi) Children education, medical requirement, minimum recreation including festivals/ ceremonies and provision for old age, marriage etc. should further constitute 25% of the total minimum wage, vii) Local conditions and other factors influencing the wage rate. It is necessary to revise this criteria to consider 4 consumption units in place of three, to consider the actual rent of a two room flat or equal to at least 30 percent of wages, the cost of children education, medical etc may also be revised to make it 30 percent of wages, and to include one more component: viii) travel and communication. The law of wages must clearly declare that the minimum wages apply to only on workers without any work experience. After an experience of six months their wages must cross the minimum wages and they must get an increment and further years of experience must be reflected in their wage increments. Dearness allowance must be added in their wages in every six months. The procedure of determination of wages must be transparent and wages so fixed must be declared with their detailed break up to enable the workers to see whether allocations to all factors are properly considered. The Minimum wages act as it exists currently, does not clearly define the categories of unskilled, semi-skilled, skilled and highly skilled workers and therefore it depends on whims of employers to put a worker in any of these categories. The new wage law must clearly define these categories, for example: a) Unskilled: Non ITI fresh workers without any experience; Semiskilled: Non ITI Workers with one year experience in any factory in same industry or related industry; Skilled: Workers with Fresh ITI degree and no experience or Non ITI workers with two years experience; Highly skilled: Workers with ITI degree and one year experience or non ITI workers with three years experience. Minimum wages of any of these categories must be 30% more than the preceding skill category. Even if only the government accepted criteria of determining the minimum wages is followed transparently, the minimum wages in any part of India and in any sector may not be less than Rs 15000 per month, however, the minimum wages declared by the governments are nowhere more than 10000 per month, and in most states it is less than 6000 per month. The labour law enforcement machinery must sufficiently staffed and equipped with facilities and powers to insure labour standards. Labour adjudication machinery must also be sufficiently staffed to stop the dynamics of delay in justice practically meaning no justice. A public charter for labour law enforcement machinery and labour adjudication machinery must be declared providing a clear-cut time frame for taking action on complaints and deciding the cases filed by labour.
ii) To address the social security needs of workers other than the regular workers engaged in formal sectors separate welfare boards based on occupations may be created in line with Fish workers welfare board in Kerala and Mathadi Workers welfare board in Maharashtra, depending on conditions in particular occupations. The boards may be tripartite in nature and financed by contributions of employers, workers and the government, with major share coming from industrialists, traders and other related business houses in particular sectors based on progressive taxation. The basic social security extended by the welfare boards must focus on: a) regulating the labour market and working conditions of wage workers and home based workers, with a similar dynamics as created by Mathadi board in Maharashtra, and b) regulation of market relations of self employed producers insuring cheaper inputs and remunerative prices for their products, c) Ensuring ESI and PF benefits to all workers including the self employed at the level applicable to wage workers earning a minimum wage, from the welfare fund, d) helping and supporting the self employed workers in making their livelihoods sustainable, and e) enhancement of skills of workers and subsidized education to their children. Insuring ESI and PF contributions for all workers from welfare fund may effectively cover certain important contingencies and insure better social security benefits to informal workers, for example, health insurance, maternity benefits and pension etc. The contingencies not covered by the ESI, for example, intermittent period of unemployment of wage workers, and losses incurred by self employed producers due to accidents and natural disasters etc may be covered by the welfare fund. The Welfare and Cess Act must be made applicable in all occupations to ensure the contributions from industrialists, traders and other business houses in various sectors for financing the welfare boards of various occupations.
iii) Land reforms must be implemented by way of redistribution of land to increase the average size of land holdings of small and marginal farmers and provide land to landless workers. Extending and broadening the rights of self employed producers and communities on the resources on which their occupations are based, for example right of fish workers on water bodies and right of forest workers on forests etc. Promoting and extending support for integration of small and marginal farmers and other self employed producers (fish workers, forest workers, pottery workers, handloom workers etc) in organizations like cooperatives, and extending subsidized inputs to them to reduce the cost of production and providing an institutional mechanism to increase their collectivity and collective bargaining power. This may be accompanied with promoting and extending support for integration of other self employed workers engaged in various kinds of services in organizations like cooperatives, to reduce their operational costs, to make them able to benefit from economies of scale, and providing an institutional mechanism to increase their collectivity and collective bargaining power and be able to regulate their services. It is also important to promote and extend support for integration of home based workers engaged in various industries and providing an institutional mechanism to increase their collectivity and collective bargaining power to be able to compel the national and international companies for whom they work, to insure better wages and working conditions for them
B. The Strategies for Strengthening the Collectivity and Collective Bargaining Power of Workers
It is ironic to see that the trade union density in India is only about 5.81 percent of the labour force and 6.27 percent of the workforce. If we disaggregate this picture then we find that the trade union density among wage workers is about 13.15 percent and among self employed workers only about 0.081 percent. Among formal sector workers also the trade union density is only about 26.48 percent and among formal workers 40.94 percent. The union density in informal sector is as low as 3.02 percent. Similarly, only 3-4 percent women workers are unionized.
This reflects on the fact that the collective bargaining power of workers is very low and in various ways it also affects the social security coverage of the workers. The workers can win a better social security system and better effective coverage of social security only by increasing their organized strength that gets translated in their increased political influence and increased collective bargaining power. The rate of unionization depends on the factors including: a) existence of the formal employment relationship in case of wage workers, b) initiatives in the nature of sub sector boards that may establish some kind of employer-employee relationship between workers in general and employers in general for example, the Mathadi boards; c) initiatives that may integrate the small economies and subsistence economies in such a way that they can articulate their collective interests and can build a collective power for their collective interests, d) large scale organizing initiatives enforcing a dominant practice of industry wide bargaining, etc. Therefore to increase the collectivity and collective bargaining power, the above elements must be inbuilt in the strategies of the working class movements.
The new situations created by the new global politico-economic regime and new international division of labour have actually expanded the arena of work of the labour movement and demand new strategies of the movement to work in wider horizons and address the new tasks. We may highlight the few important aspects briefly to indicate the wider horizons and new tasks:
a) With the integration of Indian industries in the global value chains, it is increasingly becoming evident that solidarity across the value chain in particular country and international solidarity across the value chain in particular industries is an important determinant of the strength and effectiveness of the struggle. The international solidarity is the one of the most effective weapon in the hands of working class to challenge the disastrous movements of the capital. However, in a situation when the weapon of international capital mobility is increasingly used to divide the workers on nationalist lines, both in developed as well as developing countries. A false consciousness is systematically created in workers to make them understand and articulate the issues on nationalist lines, in a way as if workers in various countries are competing with each other for jobs. But, with all the limitations, the international solidarity among workers is an increasing trend.
b) With global value chains extending up to self employed workers and home based workers, it is a compelling need to expand the organizational base of unions to these sections of workers and institutionalize a practice of industry wide collective bargaining that includes these section of workers as well. This will also require, as well as facilitate the trade unions to expand their bases in the society and develop concerns and address the issues that the workers face in the society. Moreover, the trade unions need to transform their structure and functioning to provide insured spaces for voices of women workers and other socially excluded sections, in order to strengthen the unity among the working classes. Institutionalizing the practice of industry wide collective bargaining will bring a dynamics that may effectively stop any tendencies of corruption in unions and wipe out those unions that are transformed in to professional consultancy firms (particularly in those sectors where informal workers form a majority and factory level unions do not exist), along with gradually insuring a better space for factory level collective bargaining beyond the minimum standards set by industry wide bargaining.
c) The organizing and collective bargaining was comparatively simpler when the industries were largely local and producing largely for home markets, and self employed sectors were largely the subsistence economies. With integration of economies in global value chains, and emergence of other related dynamics, it no more remains a simple case. For developing successful organizing and collective bargaining strategies in new conditions, the activists need to understand the dynamics of global value chains in their particular sectors, and related politico-economics dynamics. Without an exposure and linkage with the broader labour movement at country level, and at international or at least regional level, it is impossible to build sectoral and international solidarity that becomes important for winning the struggles in new situations. Therefore, training and education of activists, as well as providing them exposure to regional labour movements emerges as an important area of focus for the labour movement
d) Increasing corporatization and monopolization of media and their systematically built anti-labour agenda has created a situation where in the labour becomes invisible, and their actions are by and large made ineffective. For example, in series of general strikes after 2000 in India millions of workers participated, in many labour demonstrations tens of thousands of workers marched in the capital city of Delhi, but media never provided them a significant space, and many times completely ignored, reducing the effectiveness of labour actions to the extent that majority of population even did not know about it. In these situations, it is becoming increasingly important for labour movement to create its own national media
e) This phase appears as most aggressive phase of capitalism wherein the capital is not ready to accept any barriers of any kind that restricts/blocks the expansion and accumulation of capital. In absence of any effective political opposition from the workers, the state appears to be fully transformed in the corporate agent rather than a neutral agent. In the given situations any broader change in life and working conditions of workers is not possible without the political role of workers in every sphere of life and strong political power of the working class. Moving towards this direction requires initiatives including i) merger or building united platforms of trade unions in particular industries (even with maintaining their affiliation with various central or state unions), ii) a political platform of labour with a common minimum program by integrating all trade unions and other working class organizations, iii) demanding representation of largest worker’s organization in all relevant policy making/implementing bodies at all levels-central, state, district and local bodies by way of verification of membership of all organizations submitting membership returns at all levels (and not only of central trade unions as is currently done). Integration of workers movement and its emergence as political force also depends on its ability to resolve the political and ideological crisis that the working class movement is currently facing, and be able to propose a working class agenda with comprehensive set of alternative policies and strategies.
f) The political integration of labour movement and practicing a mass movement model based on Sangharh and Nirman (struggle for rights and building social and economic institutions to transform the life and work of workers in such a way that increases the collective consciousness of workers, reduces the pains of their life, as well as increases the sustainability of their livelihoods) as successfully experimented by Chhattisgarh Mukti Morcha in the leadership of Shankar Guha Niyogi, may be the major aspects of the future model of the labour movement. These strategies provide enough strength to resolve various problems (including the socio-political, organizational and financial problems) that the movements are currently facing.
• NCEUS (2007). The Report on Conditions of Work and Promotion of Livelihoods in Unorganized Sector, National Commission for Enterprises in the Unorganized Sector, Government of India.
• NCEUS (2009). The Challenge of Employment in India, An Informal Economy Perspective, National Commission for Enterprises in the Unorganised Sector, Government of India; http://www.nceus.gov.in; accessed on 20.10.2014
• GOI (2001). Annual Report 2000-2001, Ministry of Labour; http://labourbureau.nic.in/MW3ch2.htm ; accessed on 22.10.2014
• GOI (2008). TRADE UNIONS IN INDIA 2008, labour bureau Chandigarh, ministry of labour & employment, government of india ; http://labourbureau.nic.in/Trade_Unions_2008.pdf
• GOI (2013). Notice for verification of membership of central trade union organization; http://clc.gov.in/estb/pdf/Verification,Notice.pdf
• GOI (2011). Report of the working group on employment, planning & policy for the twelfth five year plan; labour, employment & manpower division, planning; government of india, http://planningcommission.gov.in/aboutus/committee/wrkgrp12/wg_emp_planing.pdf; accessed on 10.10.2014
• Papola TS and Sahu, PP (2012). Growth and structure Of employment in india: Long-Term and Post-Reform Performance and the Emerging Challenge; Institute for Studies in Industrial Development, New Delhi
• Kannan, K.P. (2011) ‘How Inclusive is Inclusive Growth in India’ paper presented at the International Expert Workshop on ‘Inclusive Growth: From Policy to Reality’, jointly organised by International Development Research Centre (IDRC), Canada and Indian Institute for Dalit Studies (IIDs), New Delhi; 11-13 December, 2011, New Delhi.
• Pong-Sul Ahn (2010). The growth and decline of political unionism in India: The need for a paradigm shift; International Labour Organization, Geneva
• Vaclav, S. (2005). Creating the Twentieth Century: Technical Innovations of 1867-1914 and Their Lasting Impact. Oxford, New York: Oxford University Press.
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Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”
What does labor want? We want more schoolhouses and less jails; more books and less arsenals; more learning and less vice; more leisure and less greed; more justice and less revenge; in fact, more of the opportunities to cultivate our better natures,”
Social progress depends not upon the ennoblement of the few but on the enrichment of democracy; universal brotherhood can be achieved only when there is an equality of opportunity - of opportunity in the social, political and individual life.
In the new global politico-economic regime with new international division of labour, informalization of labour, free mobility of capital, alarming expansion of reserve army of labour and creation of global reserve army of labour for capital, and a system of regulating at international level and deregulating at national level, the pre-globalization strategies of organizing and collective bargaining have largely become ineffective and irrelevant. Therefore the labour movements and the social, political movements in general need to develop and implement new strategies of organizing and collective bargaining effective in new global politico-economic regime.
Divide, isolate and rule is the most important aspect of the capitalism to control the labour by not letting the working class emerge as a unified force. Dividing the working class in different sectional interests, and intensifying social conflicts (caste, gender, religion, regionality and nationality conflicts etc) are important strategies of capitalism. On the other hand, by its various institutions and propaganda machinery, the capitalism blurs the link between various sectional problems and their linkage with the capitalist system and therefore the movements appear detached from each other and focused on their sectional issues rather than challenging the capitalist system that produces and reproduces these problems.
The fate of social, political movements in India depends on their attitude towards learning and building unity in diversity at various levels to defeat the capital’s attempts to divide, isolate and rule. The revival of the working class movement also depends on this factor.