The problem

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ONE of the more depressing features of our policy thinking and public discourse on the nature of economic transformation is the relative neglect of the condition of the labouring poor. More correctly, despite vociferous assertions, particularly by opposition parties and their ideologues, about how poverty and inequality show no signs of decline, labour, most of all organized labour, is seen as a major roadblock to growth. In this era of globalization and competitive efficiency the new mantra is flexibilization, a restructuring of the extant regime of labour regulation involving a dismantling of hitherto accepted protective social legislation governing labour.

If such is the state of the organized strata of the working classes, it is hardly surprising that those outside the charmed circle are worse off. Footloose labour, a term popularized by Dutch social anthropologist Jan Breman (and from whose book this symposium borrows its title), explores the multiple dimensions of both work and living conditions of our labouring poor in urban and rural India.

For close to three decades, the analytical frame most favoured by social scientists to describe the condition of such workers is the informal sector. First popularized by the International Labour Organization in the seventies in its research on Africa, the informal sector was seen as incorporating all those outside the modern urban industrial (and service) establishments engaged in a wide range of employment and self-employment activities – street vending, home-based work, contractual labour and so on. These activities are ostensibly characterized by ease of entry and exit; low skills, technology and capital requirements; and the associated labour is not covered by any social legislation. In brief, this is the peripheral, non-formal, urban economy where individuals are engaged in a series of survival activities providing useful services and goods at low prices.

Further, it is assumed that many of these individuals are migrants from the countryside, marking time as it were, till they manage absorption into the formal sector. The process of growth/economic transformation is visualized as a unidirectional process from rural/agrarian livelihoods to the urban informal and finally the formal, modern industrial and service sector. This, after all, was the trajectory mapped by the countries of the North Atlantic rim.

Subsequent experience, however, belies this simplistic belief. At the beginning of the new millennium less than 10% of our workforce is employed in the formal, both public and private, sectors of the economy. And while both the earlier planning and now the new liberalized economic process has undoubtedly impacted on poverty, with some even claiming dramatic improvements in the reduction of numbers below the poverty line, there has been less than adequate growth in formal sector employment.

Not only is the overwhelming proportion of our workforce still subsumed within the unregulated labour market – as daily, casual, bonded, contract labour – those within the ‘organized’ sector are being forced to acclamitise to new work conditions characterized by higher volatility and insecurity of employment, even in sectors where incomes may have risen. Clearly what was earlier seen as a transitional state, a waiting room where labour marked time before moving onto secure and better paid jobs, has proved to be a chimera.

There are a range of schemes both as part of general anti-poverty measures and more specifically directed at the working population to address the multiple insecurities, vulnerabilities and needs of the labouring poor – health, education, housing, nutrition, insurance and so on. But they remain incomplete and insufficient. Demands for incorporating employment as a fundamental right have invariably been dismissed as utopian for a poor, developing country. The same with comprehensive social security. In any case, with the state, never a major employer, increasingly making way for private capital, we may well be witnessing a resurgence of Social Darwinism.

It is not only the state or political parties, including of the Left, which are characterized by a stunted social imagination, at best focusing their limited energies on the organized, formal sector, working classes. Even the NGOs who claim greater sensitivity with respect to the poor fare no better. Part of the problem relates to the form of organizing. When dealing with a dispersed and highly stratified population, traditional unionism offers little hope. What about cooperatives? Or other associational forms? Will cheaper credit, both as working capital and to meet consumption needs, through the much touted strategy of self-help groups and micro-finance help?

There are those, most notably the Peruvian economist Hernando De Soto, who argue not only that the informal sector is here to stay but that its contribution to the economy is under-appreciated. Further, that if governments can simplify the laws governing the setting up of enterprises and make secure the property rights of the poor, this will go a long way in reducing poverty.

All the above, and each has been tried to varying degrees, represent at best a contingent welfare measure. A greater problem, in our view, relates to the understanding of the social processes underlying capital accumulation, a sine quo non of growth. For a start, a significant proportion of rural employment is neither self-employment or farm based, i.e. there is a large informal labour segment in rural areas. We insufficiently realize that an exodus from the village economy does not mean that the swelling numbers of migrants succeed in settling down in urban locales. Large contingents remain on the march between the town and countryside, their flow and perpetual rotation related to employment regimes marked by either self-account work or wage labour, the latter most often based on casual rather than regular contracts. The need for highly flexibilized labour markets coincides with low payment for tasks that require little skills and schooling. Above all, the informal labour regime in both rural and urban areas is growing.

The danger is that the earlier, formally benign, welfarist approach to labour is being replaced by the opinion that labour markets in poor countries need more not less flexibilization, that the protection of ‘privileged labour’ should stop, that governments must facilitate the free play of market forces. In this schema, which sees the informal sector more as a solution than a problem, there is little space for state provisioning of social security.

Is this too grim and monochromatic a picture? For instance, recent research on the impact of reforms and globalization presents a mixed picture for even the informal sector. In a recent seminar on western Indian states, it was argued that not all sectors have experienced a decline, that even when the number of days of employment have gone down incomes have risen, thereby indicating higher real wages and productivity. What, however, is not denied, even in the sectors marked by an increase in incomes, is the increase in volatility and insecurity. This, for an underprivileged strata, can imply the difference between survival and death. Jan Breman’s work The Making and Unmaking of an Industrial Working Class, on the erstwhile employees – regular and contract – of the now closed textile mills of Ahmedabad makes for instructive reading.

Globally, theorists have argued that the developments of the previous century – from social democracy and welfare capitalism in the West to the socialist revolutions – have both humanized capitalism and increased the bargaining power of labour. This is doubtful. At least in India few capitalists and politicians are worried about the organized power and consciousness of labour. If anything, they have actively worked to further fragment, ethnicize and disempower the labouring classes. One result is the greater participation of what were once lauded as the ‘emancipatory’ classes in caste and ethnic pogroms. Witness Mumbai 1992 and Gujarat 2002.

Where these social processes will lead us is uncertain. Given the disarticulation of the organized segment of the working classes, an inevitable consequence of footloose capital, attention has turned once again on social policy and politics to forge a new compact for the 21st century. This demands a new creative response, not only from policy-makers and researchers but from organizations and self-activity of labour. They will have to forge new alliances across old divides if they are to survive and ensure for their constituents a better lifestyle and future. This issue of Seminar is dedicated to this hope.