Number13

Decent Work in India: Here’s the Dirty Picture

ILO guidelines on decent work on World Day for Decent Work

What is decent work? What is India’s relation to decent work? Here’s the Number13 explainer on ‘World Day for Decent work’

October 7 is the World Day for Decent Work. Decent Work (DW) refers to a set of standards prescribed by the International Labour Organisation (ILO) to emphasise the quality of jobs and not just the quantity. 

The DW agenda was first announced by the ILO in 1999 taking cognizance of the rapid changes in national tripartite relations between governments, employers and trade unions due to neoliberal globalisation. This led to an existential crisis for the institution: “an ILO without internal consensus is an ILO without external influence(ILO 1999, p 3) –   prompting the institution to ascertain its relevance through the DW agenda at a time when there was a growing call for fairer globalization. 

Decent work, which was later integrated as Goal 8 of the UN Sustainable Development Goals, has four pillars – employment creation, social protection, rights at work and social dialogue. These goals were to be operationalised at the national level through Decent Work Country Programmes (DWCPs).  In 2010, the Government of India along with employers’ and workers’ organisations signed a DWCP document, which has been praised for its scale of operation. The current DWCP for India (2018-22) states that its overarching aim is to create “a more decent future of work through better quality of jobs, the transition to formal employment and environment sustainability” (ILO 2018, p 14)

What is the state of the Indian labour market?

In India, the relation between GDP growth and returns to labour has not been straightforward in the neoliberal period. The India Wage Report (2018) by the ILO notes that labour’s share in national income fell from 38.5% in 1981 to 35.4% in 2013. This has not only accentuated income inequalities (as returns to capital have outpaced returns to labour) but has also stunted domestic consumption by workers (which hampers domestic demand, as the poor have a higher propensity to consume than the rich). Thus, while the economic pie has certainly enlarged, there is no clear evidence that a greater share has gone to the workers who made it.

These inequalities are conventionally attributed to the dualism in the Indian economy (and the labour market) that has been compartmentalized to a formal and informal sector. There has been a consistent attempt to formalize the informal – through bringing enterprises in the latter category within the regulatory purview, inclusion within tax nets (like GST) and sometimes through direct coercion (like demonetization). However, the assumption behind the dualist interpretation is that the informal mode of employment has been marginal, where in reality, not only is it central in its contribution to the Indian economy, but it has been historically the most common form of employment as well.  Formal workers that enjoy regular pay, social protection and job stability have been an exception rather than the norm.

Informalisation all the way

As of 2018, in India, around 52 per cent are self-employed, nearly 24 per cent are regular wage salaried workers and nearly 24 per cent are casual workers. Self-employed workers are not the entrepreneurial job-creators idealized by free-market enthusiasts. They are composed mostly of own-account workers (70 per cent) and unpaid family workers (25 per cent), trapped in low-productive and low-wage activities – predominantly in agriculture and the urban informal economy. 

Even regular-wage salaried workers do not enjoy social security or job stability. Among regular wage/salaried workers in the non-agricultural sector, 69.5 per cent  had no written job contract, 54 per cent were not eligible for paid leave, and 52 per cent were not eligible for any social security benefit (PF/ pension, gratuity and health care & maternity benefits). In fact, out of 461 million workers, just around 20 per cent work in the formal sector. Among them more than half are contract labour or temporary staff. 

This indicates a growing informalisation across the economy, even in the formal sector. Thus, it is far more analytically fruitful to think of informalisation as a social process used by capital to disenfranchise labour and weaken the collective power of labour. This is experienced in different degrees in the world of work, contrary to the popular notion of a neat binary between the formal and informal. Those workers belonging to socioeconomically marginalized communities experience the highest degree of informality with limited institutional support. These workers – often seasonal/temporary migrants – are persistently at a greater risk of having their rights violated through various forms of forced labour, including physical, psychological and economic coercion.

This dismal employment scenario coincides with a low trade union density which stands at 10.7 per cent for all workers, rising marginally from 10 per cent in 1993 (ILO India Wage Report 2018). It is interesting to note that while union density among salaried workers fell dramatically from 46.5 per cent in 1993 to 28.8 per cent, for self-employed workers it rose from 4.7 per cent to 8 per cent. This is against the traditional understanding that informal is synonymous with unorganized, and also points to the innovative strategies used by labour unions during the neoliberal period. Despite the absolute numbers, the change in the balance of class forces between capital and labour – mediated by the state through rewriting labour codes – has certainly affected efforts to promote social dialogue, contrary to the DW agenda. 

An uncertain present

Covid-19 has further exposed the glaring decent work deficits in the Indian economy, for instance, through the plight of millions of inter-state migrants who got stranded during the lockdown.  That governments (save for exceptions like Kerala) abdicated responsibility and employers did not provide security points to the tremendous gap between aspiration and reality in terms of decent work.  A large-scale survey by the Center for Sustainable Employment finds that those engaged in the informal urban economy reported drastic losses of employment and a decline in incomes. 

The pandemic-induced job losses should be read against the backdrop of falling non-agricultural job growth, which has raised further concerns about harnessing the demographic dividend. An ILO-ADB report predicts that youth are more likely to lose jobs at a faster rate than adults, with India losing around 4.1 million youth jobs due to Covid-19. A further increase in unemployment figures certainly does not bode well for the already strained democratic fabric of the country.

Has this rendered the ambitious goal of decent work unachievable? Not quite. Covid-19 has taught the world about the necessity of public investment, especially in universal health and social protection systems. However, the inadequate size of the fiscal stimulus has pushed an equitable economic recovery beyond the horizon. One of the key lessons from labour history is that gains to the working class are not given through top-down interventions, but won through organized struggle. Perhaps the biggest takeaway from the current crisis is that without a united front of all workers (including underpaid care workers) that institutionalize pro-labour policies, decent work would remain a pipe-dream. 

Aabid Firdausi MS is a research student at TISS, Mumbai. 

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