Center For Workers Education

for building a democratic labour movement in India


Challenging Corporate Led Globalization

Ensure Health and Safety at Work and in Society

For Protection of Labour Rights

Social Security for All

Challenging Corporate Led Globalization

The capitalist expansion means nothing but an all round war launched by capital to commoditize and privatize everything in the universe whatever is still left in the public space and centralize the ownership and control of everything in the corporate hands. The success of capital in this drive depends on the balance of power between capital on the one hand and labour and people at large at the other. This war is continuing since the emergence of capitalism. This war and the power balances between the two classes is very well reflected in the state’s behavior in terms moving in favour of people, trying to be neutral or openly taking the position of capital in different periods. It is also reflected in varying scope and coverage of state’s control over national wealth and resources and also its regulatory authority in different periods. In this light, the current phase of globalization is most aggressive phase of capitalist expansion which is commoditizing virtually everything from nature to emotions, privatize everything whatever is still left in the public space, transferring the ownership and control of everything in corporate hands and virtually transforming the state in the corporate agent. With the private capital sitting on the driving seat and taking control of all wealth and resources and even the regulatory functions, the finance capital controlling all the world affairs (sitting at a distant place and detached from production activities), and the capital having attained unrestricted mobility invading all corners of society and the world in hunt for super profits, the whole world in essence looks like heading towards a stage of conscious barbarism.

Expansion and reorganization of production has almost assimilated everything in the value chain of the global capital. Huge section of various categories of self employed workers and peasants are assimilated in the global value chain and virtually converted in most exploited category of wage workers. The global value chain compels them to impose a self discipline on themselves to produce surplus value for capital

The reorganization of production operations on post-fordist models is most important aspect of globalization. This reorganization resulted in factories taking the shape of global factories. Totransfer the burden of social and environmental costs of production, the labour intensive and environmentally costly manufacturing operations are largely being shifted to the developing countries. This is accompanied with imposition of new global economic order implanting export oriented development models based on foreign investments in all third world countries. Therefore, the developing countries are compelled to compete with each other for more and more export orders and for more and more share of foreign investments. Metropolitan capital is reaping super-profits by throwing them in this cut throat competition. This competition becomes unique in the sense that the victory depends on another actual war with its own people, its own working class. To win this battle they are actually competing with each other in providing huge incentives to corporate in various forms including tax exemptions and unrestricted access to natural resources and unrestricted supply of cheaper labour etc. This has far reaching impact on the working class. The informalisation of labour and rampant violation of labour rights is actually inbuilt in this development strategy.

The life of capital depends on generating new real and un-real needs in the society, which is essential for capitalist expansion and also for increasing dependencies of the people on capital. The global capital as ‘class for itself’ is more equipped than in any earlier phase in effectively addressing this task and exercising effective psycho-cultural control over workers and society in general. This has an overall negative impact on the power of the working class.

Globalisation and liberalization, in the process, also created its force and resulted in the formation of a new transnational capitalist class (TCC) in the leadership of metropolitan capital, including the corporate of the developing countries who very soon transformed themselves in multinational corporations. It is in this background that the deregulations at national level and reregulation at international level became the rule of the game and supranational economic planning agencies captured the stage for virtually acting as international governments. Now the regulations for the global economy are to be decided by these supranational economic institutions like the International Monetary Fund, the World Trade Organization, the World Bank, and the OEGD, and business planning forums like the World Economic Forum (WEF), the Trilateral Commission (TLC), and the International Chamber of Commerce (ICC) etc. and the national governments are only to implement these regulations by harmonizing their regulations with these international regulations. The shifting of regulatory responsibilities to the international institutions (who are generally beyond the reach of the people) is also part of the effort to depoliticize governments, especially with respect to those matters that might be particularly contentious at the national level.

The global capital acting as ‘class for itself’ is acting in very conscious and planned way, at both production places and in society in general to blurt the class consciousness of the working class. At the factory level this is done by new management practices well designed to continuously inject pro-capital and anti-labour perspectives in workers; and the huge network of ideological, political, cultural arms of global capital well infiltrated in social movements effectively work for achieving the same goals in society in general.

However, disastrous impacts of globalization very soon generated widespread anti-corporate and anti-globalization sentiments which led to emergence of a strong global people’s movement demanding for international regulations to ensure labour rights, human rights, environmental rights and social rights to the people. Therefore, the Transnational Capitalist Class was forced to take a pro-active initiative to counter the movement for international legislations controlling the behavior of the TNCs and the outcome was CSR-Voluntary initiative of the corporate. Therefore political agenda of the CSR is very clear-to forestall any kind of legislation at international level controlling the behavior and restricting the activities of the corporate. Inherent in the agenda is projecting a socially responsible image of the corporate and dilute the anti-corporate and anti-globalization sentiments; and also getting a space to hide all TNC sins from public eyes. The height of all this is that CSR has been converted in to the source of profits. CSR has also generated a new business-the verifying and auditing agencies. Large number of NGOs are actually co-opted by their conversion in CSR auditing agencies and many other by providing huge funding on CSR research and campaign (actually for doing everything to justify CSR, mild criticism is always to maintain neutral image). On the other hand, the impact of CSR activities is also disastrous in the sense that it both directly and indirectly transforms rights based people’s consciousness in beggar’s consciousness and injects in them a deeply penetrated dependency.

Therefore, there is an urgent need to challenge the corporate led globalization by all means and at all levels. To challenge the corporate led globalization, requires an alternative politics of Pro-Labour Globalisation and an agenda for Pro-people and Pro-Labour New International Economic Regime.

The politics of the global capital can only be challenged by the politics of global labour. The politics of voluntary CSR can only be challenged by strong social and political movement for international and national regulations.

It must be clear to us that in the current International economic regime; even to fight against deregulations (and for re-regulations on labour rights, human rights, social rights and environmental rights) at national level is difficult unless it is accompanied by a strong movement for the same at international level. After becoming part of WTO, the nations have lost their capabilities to regulate on the issues that affect the issues involved in WTO agreements they have signed. And if we enter in any issue of labour rights, human rights, social rights and environmental rights, it demands such legislations and financial implications that may not be allowed in WTO framework. Many of the issues related to these rights require state subsidies, welfare expenses and renationalization of public services on the one hand, and regulations to control the behavior of the corporate on the other. It will certainly violate the framework of WTO. It requires a courage and will power to challenge the WTO framework, and only those states can have that courage that are largely pro-labour and pro-people.

It is worth noting that the emergence of a strong movement forcing for international regulations and the New International Economic Order (NIEO) in 1960s and 1970s was possible only because of comparatively more pro-people regimes in newly independent nations who formed G-77 and the coalition that emerged between trade union movements, social movements and the G-77. This coalition was force broken by imperialist countries in 1980s by crushing the backbone of developing countries that fell in the debt trap in 1980-82 crises.

However, there is a possibility that such coalition may again emerge. Right now all the factors for the coalition are still weak; however, contradictions in globalization are growing so fast that in near future things may change. Trade union movement is still weak, but if we look at the ground it is fast growing and gaining strength. Global justice movement appears much larger and stronger than its earlier incarnations. And the third factor with all its weaknesses and limitations, has also emerged on the seen in the form of G-20+ (including, among others, Argentina, Bolivia, Brazil, Chile, China, Cuba, Egypt, Guatemala, India, Indonesia, Mexico, Nigeria, Pakistan, Paraguay, Peru, Philippines, South Africa, Thailand, and Venezuela). The G-20+ was introduced to the world in 2003, at the WTO’s fifth ministerial meeting in Cancun, where developing country governments organized themselves in response to longstanding concerns over agricultural subsidies and trade-related intellectual property rights. The group’s demands were not met and the talks collapsed. It is quite evident that G-20+ has a positive role. However, G-20+ is far weaker in all respects than G-77. There is possibility of alliance between trade unions and social movements with G-20+ only when the movements are strong enough to compel G-22+ to ally with the people and raise their concerns. But with consistent efforts to come together to fight on the issues of the common concern at international level can be the only way to realize this possibility in whatever extent.

Ensure Health and Safety at Work and in Society

Globalisation has converted less developed countries into pollution havens for dirty industries. The share of dirty industries in total FDI in India was 51 percent in 1991-2000. Of these 27.4 percent was in energy, 4.5 percent chemicals, 7.5 percent transport, 5.5 percent metallurgy and 3.5 percent in food processing, all classified as Red or most polluting industries, while hotels and tourism having 1.7 percent and textiles 1.2 percent came under orange industries. The largest inflow to approvals of foreign investment was in the dirty industries chiefly chemicals.

Many goods produced by the public sector were de-licensed and private and foreign firms were allowed in these sectors including polluting industries such as mining, power generation, Chemicals etc. The impact of this on environment is already visible. The impact of Hindustan Lever’s mercury thermometer factory on Kodaikanal environment can be seen as example. Mercury poisoning went almost 250 times the permissible limits and adversely affected the environment of the region. It is also to be noted that the Hindustan liver opened this factory here after closing down its unit in USA, and therefore the environmental cost of the Mercury thermometer production is transferred from USA to India.

India’s 75000 km of long coastline has already been converted in to a destination for waste disposal of the entire world. Lead Ash, Battery scarp, Zinc ash, waste oil and old ships laden with asbestos are increasingly reaching here. India is importing over 70,000 MT Zink waste and 50,000 MT lead waste through its 7 major and 100 minor ports. Huge amount of plastics and metal waste are coming into India from Australia, Canada, UK and USA apparently for recycling. Indian company Futura industries of Tamilnadu imported 10,000 metric tones of plastic wastes since 1992. Indian coasts are now emerging as world’s largest ship breaking yards. This is only the tip of the iceberg and shows only the trend. The complete picture is really scary. The pollution content ratio of India’s trade increased from 0.480 in 1985 to 1.38 in 2000.

Excessive use of ground water and pollution of water bodies by the MNCs both Indian and Foreign are putting heavy pressure on already depleting water resources and severe water crisis is emerging in different regions of the country. Now in the name of accelerating industrial growth not only huge amount of land including agricultural land, water bodies, forests, wet lands, coral reefs and environmentally sensitive areas are transferred to special economic zones and other industries. In many regions, industries have been allotted the land adjacent to the marine National part and wild life reserves.

On the other hand, the states are allowing self certification on various aspects of Factories Act including Occupational health and Safety and for the environmental issues and discouraging inspections for ensuring compliance. As a result OSH problems are increasing alarmingly which is reflected in increasing incidences of factory fires and accidents. According to ILO estimates, around 403,000 people in India die every year due to work-related problems, i.e. more than 1,000 workers every day or 46 every hour die due to occupational health and safety problems.

In such situations, the safety at work and society emerges as one of the most important concerns of labour movement and people’s movement. The campaign aims to expose and widely publicize this problem to make it an issue of national concern. The objective of the campaign is to form a coalition of various trade unions and workers organizations on this issue and build a movement to pressurize the government to enact effective policies to address these concerns.

For Protection of Labour Rights

Globalization and liberalization is coming as all round offensive against the working class. Downsizing, closures and privatization of public sector units has thrown and is throwing large number of workers out of jobs. Thousands of dalits not only lost their jobs, but also a big space that was ensured for them in public sector, because reservation policy was not extended in private sector. In absolute terms, the public sector shed 1.46 million workforce between 1993 and 2006.

There is an unparallel informalisation of Jobs in the industries, both by transferring the jobs from formal to informal sector and by casualisation of jobs in the formal sector. The net growth of employment from 1999-00 to 2004-05 has been largely of an informal kind. This is true of both formal and informal sectors. What this means is that even the increase in employment in the formal sector is entirely that of informal employment suggesting informalisation of the formal sector as far as employment is concerned. This duality in the labour force is increasingly institutionalized and there are almost no chances for upward mobility for the workers at the lower levels. This duality also reflects on the caste divisions in the society, since majority of contract/casual workers both in informal sector and formal sector are drawn from dalits and other backward communities

Pauperisation of peasantry and mass destruction of livelihoods (land acquisitions for urbanisation and industry and destruction of traditional occupations by way of replacing their products and services by industrial products and modern services) created a huge reserve army of labour flooding in the industrial centres and creating downward pressure on wages.

In a situation with unrestricted mobility of capital, export oriented development based on foreign investments is increasing vulnerabilities of workers to alarming levels. It was reflected in the current global financial crisis when about one million workers lost their jobs. Moreover, the sword of mass unemployment remains always hanging (out of fear that capital may fly away to another destinations). It drastically reduces the collective bargaining power of workers.

There is consistent attempt to amend the labour laws in favour of the employers, and even if no major amendments in labour laws could be done due to strong protest from trade unions, the laws are virtually made irrelevant by allowing violations and paralysing the inspection machinery. Even if the laws are largely the same, the courts interpret them differently and the workers are denied any relief. The courts have already made precedents in favour of employers, saying that casual/contract workers have no right to claim regularisation. There are also judicial precedents saying strike is not a right and putting a ban on the general strikes. Proposals of National Commission on Labour for amendments in labour laws include: Reduction of labour cost for building competitiveness so that Indian industry, employing more and more workers as casual and contract workers to resolve the problem of unemployment, and withdrawal of the protection provided in Industrial Dispute Act for nearly seventy five percent of the industrial units, leaving the workers at the mercy of the management (by allowing the employers to hire and fire at will, retrench or close the industries at will, in establishments with less than 300 workers; also proposing to exclude workers getting more than Rs 25000 per month from the definition of ‘worker’ under Industrial disputes act). There is also an attempt to make the protective provisions meaningless by allowing employers retrench and close any factory at will, and it is proposed that in industries employing more than 300 workers employers can retrench or close the industry if the Governments does not reply within sixty days. It is also proposed to make it compulsory to hold secret ballot for strike and only if 51 percent workers vote in favour of strike then only strike will be considered as legal strike. In the case of illegal strike 3 days wages can be deducted from workers for each day of strike.

Hundreds of the Special Economic Zones (SEZs) that are coming in the country are declared public utility services under Industrial Disputes Act. Even when there are no major amendments in labour laws for SEZs, the whole labour relations machinery is put out of the interventions of state labour departments and the powers of labour department are transferred to the SEZ development authorities (which includes the representatives of private developers of the zones). Now, New Manufacturing Investment Zones are being planned on the same lines for manufacturing industries and it is proposed that they will be exempt from applicability of all important labour laws. It is a clear intention to completely informalise the workforce of the zones-i.e. to make the labour laws meaningless without amending it (after NMIZs come in to existence nothing will be left outside the zones and if NMIZs get exemption from labour laws, SEZs will also automatically get these benefits)

The states are allowing self certification on various aspects of Factories Act including Occupational health and Safety and for the environmental issues and discouraging inspections for ensuring compliance. As a result OSH problems are increasing alarmingly which is reflected in increasing incidences of factory fires and accidents. According to ILO estimates, around 403,000 people in India die every year due to work-related problems, i.e. more than 1,000 workers every day or 46 every hour die due to occupational health and safety problems.

The growth rate of wages of almost all categories of workers including casual work which concerns the bottom layer of workers has declined during 1993-94 to 2004-05 characterized by economic reform compared to the previous decade of 1983 to 1993-94. This is clearly a case of generalized slowdown in the growth of wages when the overall economy registered a higher growth in income during the second period compared to the first. Declining collective bargaining power of labour is also reflected in sharply increasing share of profit and drastically declining the wage share (since 2001-02), resulting in depressing purchasing power. Approximately 73 million out of 173 million wage earners throughout India do not receive minimum wages. About 30–40 per cent of these low-paid wage earners belong to poor families. It is also accompanied with soaring prices of essential commodities amounting to double attack on workers.

It is in these situations that there is a revival of labour movement from below. A new wave of workers struggle for unionization is emerging by and large independent from the central trade unions. In the recent years, most of the workers struggles emerged on this issue only. They formed or tried to form the union and then repression was unleashed against them, and then in many cases the managements declared lock out of the factory, workers were arrested, but the struggles continued and in many cases lastly the workers won. However, in some cases they were suppressed. In 2009-10, most of the well known workers struggles were on the issue of formation and recognition of the trade union; for example, workers struggle in Graziano Transmissioni in Noida, Rico Auto Ltd and Sunbeam Auto Ltd in Gurgaon, Pricol in Coimbtore, Hyundai motors, Foxconn and Madras Rubber Factory in Chennai, Nestle in Uttarakhand, and most recently in Maruti Suzuki in Gurgaon etc. It is also interesting to note that formal and informal workers are coming together in the struggles for unionization. In most of the above cases of workers struggles both formal and informal workers were together. It explains that the conditions have already entered in a new phase when the numbers of informal workers in factories are either equal to or more than formal workers and generally with same competence levels. Therefore the enmity of formal workers with informal workers has gone. Now rather than trying to oust informal workers, the formals are uniting with informals and demanding regularization of their jobs so that they get the same status and benefits as formal workers. Unionizing all the formal and informal workers under the same union is actually one major step in this direction.

On the other hand, the industrialists are not ready to accept trade unions in their factories at any cost. They are unleashing unimaginable repression on workers and trade union leaders when there are efforts to form trade unions in their factories. Even after the trade unions are formed, managements are not ready to recognize them and therefore deny them space for collective bargaining. Trade union leaders and workers associated with them are facing intense and large scale victimizations by the managements. Multinationals seems to be at the forefront in unleashing the repression against trade unions and the workers.

It is in this background that the campaign for Protection of Labour Rights becomes importants and urgent. This campaign aims at forming a coalition of trade unions and workers organizations, particularly the smaller and weaker ones and that are emerging from below, and that are in urgent need of support. It also aims to build a broader alliance of trade unions and workers organizations including the larger and national trade unions on the broader issues of anti-labour moves of the state and the capital and against overall offensive of corporate led globalization against the labour.

Social Security For All

With the disastrous impact of globalization and liberalization becoming more and more visible, the issue of Social Security is emerging as an important agenda both for the states and the labour/people particularly in developing countries of Asia, Africa and Latin America. The motives are certainly different but for both capital and labour, 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. And for the 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.

It is the globalization and liberalization that is leading to mass destruction of livelihoods and aggravating the problems of unemployment. It is the privatization of public sectors, health, housing, education etc that is aggravating the problems of the poor by increasing the cost of living. It is the corporate led globalization that is aggravating the farmers’ plight. All this amounts to the direct or indirect loot of the workers, farmers, and the people at large by the corporate. But the corporate have nothing to pay to the society. Rather, they are being granted huge amounts of benefits in terms of tax exemptions etc.

Therefore it is the obligation of the corporate to pay back and the right of the people to get back. The state has the responsibility to ensure this ‘get back’ for the people by way of redistributive justice. It is in this light we argue that the Social development and social security to the people can never be a charity or business; it is the right of the people and the responsibility of the state. Only by fulfilling this responsibility, the state gets a legitimacy and authority to ask the people to comply with the laws and policies. If it is denying fulfilling this responsibility, it will also loose this authority.

Social Security from the labour and people’s perspective must include the measures that help in removing/reducing the scope of contingencies, and ensure the ‘get back’ from the corporate. With this perspective we propose the following structure of social security:

1. Basic Social Security

A basic social security fund must be created by the government by collecting 75% of the funds from the corporate by way of progressive taxation and 25% from the people by way of progressive taxation. It is to be run by tripartite body of workers’ organisations, state and employers’ organisations. This is the only justified way to ensure the basic security because the privatisation and Globalisation-liberalisation has forcefully economically weakened the state and the people and enriched the corporate and therefore the major portion of financial responsibilities of basic social security must also be shared by the corporate. The basic social security must include the following aspects:

  1. Employment as legally enforceable right to all and Unemployment compensation equal to that part of minimum wages, including basic wages (defined in later chapter on minimum wages), dearness allowance, housing rent and maternity benefits. It is to apply to all long-term and periodic unemployment (unemployed youth, long-term unemployment of workers, seasonal unemployment in various sectors like agriculture etc)
  2. Subsidized education, health &sanitation, drinking water and housing facilities to all
  3. Food Security to all (subsidized food items throw Public Distribution system)
  4. Ecological Security to all (maintaining the ecosystems and prohibiting any activity disturbing it—to protect the people from eco-disasters)
  5. Land reforms to increase the average size of land holdings
  6. Subsidized inputs to small and marginal farmers; and also to other self-employed producers
  7. 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
  1. Disability pension (equal to the part of minimum wages, including basic wages, dearness allowance, housing rent and maternity benefits) + free travel with one assistant + free health care to all disabled persons who are unable to work
  1. Maternity benefits to all women. Those who are employed in industries, the cost must be paid by the employers (as it is part of wages) and for the rest it is to be covered by the social security fund

2. Contingent Social Security

In view of high level of informalisation, it is necessary to establish an Industrial contingency fund (may be categorized industry wise also) at district (regional) level by instituting a system of collecting proportionate contributions from all employers (including formal and informal industries, private and government industries) by way of progressive taxation. All the workers in the districts (regions) must be registered under the Industrial Contingency Fund (may be registered industry wise also) and they may be allowed to directly claim the benefits from this office. This will also be useful as a first step towards formalization of the workforce.

  1. Unemployment created by way of dismissal/retrenchment/layoff or closure of industries: Compensation equal to six months’ salary to be paid by the employers and if not getting employment in six months then to be considered unemployed under basic social security
  2. Employment injury compensation: Total wage for whole period of out of work, and treatment cost +compensation for any minor or major disabilities created by injury must be paid by the employers
  3. Death or major disability making the worker unable to work: Disability pension or alternative livelihood to survivor + compensation and free education and health cover to the family. In case of workers employed in the industries, total responsibility goes to the employers and in case of others the responsibility goes to the state
  4. Livelihood destruction and displacement (due to natural or man-made disasters): Decent alternative livelihood ensuring comparable income + rehabilitation along with compensation. The total responsibility goes to the state
  5. Crop failure/ destruction or death of castles etc: Enough support to compensate for the losses and to regenerate their livelihood security. The total responsibility goes to the state

3. Social Assistance

The issue of employment rights, minimum wages, poverty and social assistance are linked with each other. Employment as legally enforceable right to all and decent wages are the two crucial factors which can resolve the problem of poverty and reduce the need for social assistance to a great extent. Therefore major focus of social security must be on these two aspects. Legally enforceable employment right (or livelihood right) and a decent wage is a right of all human beings and it is the very basic and primary responsibility of the state. The state has no legitimacy if it does not accept this responsibility. On this ground the social assistance to poor is not a charity. It is actually the unemployment benefit that the state is obliged to provide to the people if it fails to provide them decent employment/livelihood. While discussing the issues of social assistance we should also keep in mind that the contingencies that were occasional in nature in pre-globalization period took shape of systemic contingencies in the globalization era. Therefore the social assistance must address this aspect also. We propose the following structure of social assistance:

  1. The guarantee of employment on demands to every adult individual (rather than one member of the family) and extending the scope of National Rural Employment guarantee Act to urban sectors also. Employment guarantee in various sectors must be decided on the basis of thorough studies estimating the average annual days of unemployment in various sectors
  2. Creation of employment through development works must not be limited to construction of roads and water bodies, it must also include to build in rural areas: a) hospitals, schools, libraries, sports facilities and recreation centres etc, and b) community owned economic projects like fruit gardens, beekeeping, fisheries etc.; and in urban areas: housing, education and recreation facilities for workers, along with various forms of cooperatives
  3. A public distribution system to provide at least cereals, pulses, edible oils, sugar, salt, fuel, cloths, soaps etc at subsidized rates
  4. Subsidised inputs to self-employed producers in agriculture and other traditional occupations
  5. Subsidised and easily accessible/approachable health services
  6. Free education up to 12th standard and subsidised higher education
  7. Maternity benefits

These benefits must be extended to all wage workers and self-employed. There must be no poverty line constraint for eligibility under these assistance programs, since the poverty lines everywhere excludes majority of these sections who are actually poor.

4. Minimum wages

Minimum wage is also linked with the social assistance, and actually the social assistance is a part of minimum wages that corresponds to the basic human needs. Therefore it is important to argue that the minimum wages must be deconstructed and in various components must be qualified and quantified separately to decide the minimum wage. It is also to be taken in consideration that the minimal basket of basic human needs keep expanding with economic and social progress of the society. Moreover, globalization and liberalization has created new risks that need to be addressed in wages like intermittent periods of unemployment due to informalisation. Taking in to account all theses aspects we propose following structure of minimum wages:

1. Basic Wages (not less than 50% of country average wage), to meet basic minimum expenses of family in:

  • Food and fuel, drinking water, sanitation, clothing, lighting
  • Education
  • Health
  • Recreation, festivals, Marriage etc
  • Social travel and communication etc

2. Dearness allowance

3. Housing rent

4. Maternity benefits

5. Additional travel allowance for daily travel to workplace

6. Lunch and Tea allowance for working days

7. Additional Clothing allowance for workers

8. Compensation for frequent intermittent periods of unemployment due to informalisation (on the basis of average days of unemployment for casual workers in different sectors and different regions)

9. Productivity bonus: increment in Basic wages with the same percentage points as increase in GDP

10. Provisions for old age-Provident Fund and Pension

11. Employment injury compensation (in addition to leave with pay and treatment)

12. Retrenchment compensation equal to six months salary

The deconstruction of minimum wage in above terms and computations of each part separately empowers workers to understand and critically evaluate whether the fixation of minimum wages is on actual basis or not, and for which part they are actually underpaid. This will not only raise their consciousness but also empower them to clearly articulate demands for improvements/increments in wages.

This deconstruction also helps us in understanding which part of minimum wages should be considered for social assistance to the unemployed and to those who are unable to work. Social assistance must be that part of minimum wages including Basic wages, Housing, Dearness allowance and Maternity benefits; because this part of minimum wage represents the basic needs of the human beings. Other parts apply only to those who are working.

Deciding minimum amount of National minimum wage will be of very limited value; mainly to set a basic standard below which no one is allowed to hire any worker, and it must be considered as offence to nation. (It is worth mentioning that in India, there is a National Floor wage, but binding only to central government and not state governments). But more effective and of more practical value will be National Floor Basic wage, which will set a more or less common minimum living standard for the workers.

5. Establish Labour Employment Centers

The compliance of minimum wages is a big challenge. With a huge informal sector, rampant informalisation of jobs and huge reserve army of labour, taking advantage of abundant supply of labour and competition among workers, the employers easily violate the labour laws and generally do not pay the minimum wages. In such situations, without a structured system of hiring labour, the compliance can not be ensured. In present situations in India (and probable in other developing countries also) the most effective way to build such a system can be establishing labour Employment centers in all industrial regions and all cities and rural centers (in villages it can be linked with NREGA registration system) and making it compulsory that all workers (informal&formal, private and public sector) must be registered with these centers, and hiring labour for any work must be done through these centers. These centers should be established by the government with active involvement of trade unions and other labour organizations. The registration can be skill wise and sector wise also. There may also be a section at the center for self-employed workers. This system can also be linked with the Basic Social Security Fund and Industrial Contingency Fund to ensure a smooth process for providing social security benefits to workers. In present situations, this system will also be one effective step towards the formalization of informal labour. Therefore it will help in building the unity of informal labour and formal labour on the one hand and increase the collective bargaining power of the workers on the other.


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