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Labour under Stress: Findings from a Survey

Restructuring, cost-cutting and other associated trends in Indian industry in recent years have had a major impact on workers in organised industry in India. This article presents the results from a primary survey conducted during 2004-06 in pockets of Delhi, Gujarat, Haryana, Maharashtra and West Bengal.

NOTESEconomic & Political Weekly january 19, 200865Labour under Stress: Findings from a SurveySunanda Sen, Byasdeb Dasguptaadjustments – occupational dislocation, unemployment, industrial restructuring and obsolescence of capital. The conse-quences include rising disparities between fast-growing and slow-growing industries and considerable stress for those, includ-ing labour, who are dislocated in the pro-cess. For political and social stability, these may necessitate cost-sharing and conflict resolution mechanisms which are also socially credible.The status of labour needs to be situated in the above context of industrial restruc-turing and occupational dislocation. In-dustrial restructuring is capable of con-tributing to deindustrialisation in some cases and the creation of new sunrise in-dustries in others. The process basically is riveted around cost-cutting devices with labour as well as the less competitive in-dustries bearing the burden of adjustment. The channels of cost-cutting adjustments across industries include the use of (i) pro-ductivity augmenting technology and (ii)flexible labour by recruiting more labour on a contractual basis. The implications of these reforms have been far-reaching for Indian labour, particularly in the organised manufactur-ing sector. As shown in a recent study Panchmukhi, Kumar and Das (2004). Foreign direct investment (FDI) inflows have affected the structure of the Indian industries, which tried to cope with the challenges of competitive pressure in the market by opting for labour-displacing and productivity en-hancing technologies. Further, as the subsidiaries of foreign firms are usually vertically integrated, even the additional employment effect ofFDI flows often remain conjectural. We recognise that information available at the secondary level from official sources does not enable an in-depth inquiry into the conditions of labour under globalisa-tion. To overcome the lacunae, we under-took a field survey of organised labour employed in manufacturing industries in a few states of the country. While at an ag-gregate level, our analysis of secondary data, as provided in the previous study [Sen and Dasgupta 2006] indicates a rather unfavourable picture for factory labour as This study is part of the ICSSR-IDPAD funded project on ‘Political Economy of Labour in a Globalised Economy’. We acknowledge the financial assistance received from IDPAD for doing the study. We are also thankful to Gary Dymsky for his insightful suggestions on the paper. Prasenjit Bose, Atulan Guha, Amit Kumar Bhandari and Hamida helped us in carrying out the field survey and in data compi-lation. We are thankful to the participants and organisers of JNU-IIAS National Seminar on ‘Making Growth Inclusive with Reference to Employment Generation’, June 28-29, 2007 at the Jawaharlal Nehru University, New Delhi. The usual disclaimer applies.Emails: byasdeb@gmail.comThe logic of economic reforms in India has been growth-centric and subscribes to the interest of corpo-rate global capital. It has been contended in mainstream economics that the spill-over effects of growth would usher in a better world by making everybody better off. It is further held that “competitive capitalism” is the means to achieve growth, by providing an institution which links local production to the circuits of global capital. Viewed from this perspec-tive the growth-centric logic of economic reforms in India can be treated as a shift from the long protected “non-competitive” to the “competitive” markets which reduces the “wasteful” utilisation of resources including that of labour.Competitive pressures as arise by open-ing up an economy are usually expected to initiate shifts in the country’s industrial structure, from the high-profit low-output scenario of the pre-reform years to scale expansions and low profit margins in the post-reform period. The process logically entails cost reduction, quality improve-ments, and productivity growth. How-ever, at the same time these competitive pressures are expected to weaken the implicit social contract in the economy, and in particular, in its formal sector. In defence it is even held in mainstream theory that the implicit social contract had been a part of the autarchic industri-alisation strategies which in the past were responsible for slow growth in these economies.As competitive capitalism relies on the removal of barriers to entry, the process demands exit routes for capital, from what is considered as inefficient use to more productive, cost-effective and better quality operations. The resulting shifts in the utilisation of labour and capital are considered the basic prerequisites for rapid growth on a sustained basis. However, the process involves stressful Restructuring, cost-cutting and other associated trends in Indian industry in recent years have had a major impact on workers in organised industry in India. This article presents the results from a primary survey conducted during 2004-06 in pockets of Delhi, Gujarat, Haryana, Maharashtra and West Bengal.
NOTESjanuary 19, 2008 Economic & Political Weekly66are employed in manufacturing, field sur-veys undertaken by us reveal the qualita-tive dimensions of work including the wide dissimilarities as well as adverse conditions in terms of wages, working hours, institutional voice representation, and skill at a disaggregated level. We provide below the main findings of our survey and the analysis of the results. 1 The Primary SurveyWe undertook a field survey of labourers in organised manufacturing industry in selected pockets of West Bengal, Delhi, Haryana, Gujarat and Maharashtra over a period of 14 months during 2004-06. We could in-terview a total of 615 factory labourers. These workers were selected at random from the industrial clusters of dif-ferent areas in these states which include Mayapuri, Okhala and east Delhi in Del-hi, Ghaziabad,NOIDA and the NOIDA special economic zone (SEZ) as well as Faridabad in Uttar Pradesh, Gurgaon in Haryana, Kolkata, Kalyani, Howrah, Hooghly and the Falta SEZ in West Bengal, Surat in Gujarat, and Santacruz SEZ and other areas of Mumbai in Maharashtra. It is important to point out that the survey was conducted in three SEZs of the country which include Falta in West Bengal,NOIDA in the national capital region of Delhi located in Uttar Pradesh and Santacruz at Mumbai in Maharashtra. A structured questionnaire was used in field surveys to gather information from the industrial labourers. To avoid bias in our sample no more than five workers were selected from a single factory. Be-sides in some areas a few management surveys were also conducted. As is typical in field surveys, in our interviews we could not access easily the female workers for various reasons. We had to contend main-ly with male workers and make an attempt to understand the plight of the women workers indirectly by talking to males. In addition to the use of questionnaires, we also had an intensive survey of workers in the labour-intensive tobacco manufactur-ing (bidi making) workers at Aurangabad in Murshidabad district in West Bengal.We provide an analysis in the following pages of the data obtained from our surveys. This involves a grouping of the data according to one or other characteris-tic we consider important for analysis. These characteristics include job tenure, age, education, skill, migration, trade unionmembership, trade orientation and locations of industries. The device allows ustohave a comparative analysis of dif-ferent areas, different industries and different categories of workers as have been interviewed in the survey. The details of the exercise are provided in the following pages.These groupings of labourers in the sample as are related to the specific attributes can be used to answer the fol-lowing queries: (1) In job contracts, one can distinguish between permanent and casual workers. Are the casual workers more hard pressed than their non-casual counterparts? Is the disparity between the workers significant in terms of nature of job tenures or contract? (2) Education plays a crucial role in skill formation. Do the differences among the workers in our sample vary with their education level with less educated workers being margin-alised in comparison with the more edu-cated ones? (3) Caste is a social institu-tion in Indian society which stratifies the labourers. Caste identity may be crucial for skill, education and earning levels. Can we hypothesise that the non-general cate-gory of workers, which in-clude scheduled castes(SCs), scheduled tribes(STs) and other backward classes (OBCs) and for that matter minorities, are unfavourably placed compared to the gene-ral category workers com-prising higher caste in terms of wages and other ameni-ties? (4) Trade orientation of industries may matter in dif-ferentiating labour accord-ing to wages, hours of work, savings, non-wage benefits, voice representation, sav-ings, a growing fear of losing jobs and of security levels in general. We have introduced trade orientation as an at-tribute by grouping the in-dustries into exportables and importables and then tested the above hypothesis. (5) Structure of industries and their changes also matter significantly in ex-plaining the gaps among workers in terms of wages, working hours, voice represen-tation, non-wage benefits, security levels as well as fear of job loss, if any. We have identified the labour- and capital-intensive industries in our sample to test the rele-vance of the industrial structure in terms of the above mentioned aspects. Industries in the sample are classified according to the changes in labour/capital-intensity in the post-reform period as compared to the pre-reform years. (6) Migration of labour across different parts of the country in search of new jobs and means of earnings may be relevant in explaining levels of their current earnings and job insecurity. Workers who migrate are often engaged in factory jobs on a contractual or casual basis, while permanent regular workers Table 1: Job Tenure of Workers NumberMeanMeanSavingUnionFearofPro-GratuityBonus (N) Hourly Hours of (% of Member- Losing vident (%) (%) WageWorkWages)shipJob Fund (Rs)(%) (%) (%) Casual Mean344 11.07 9.45193243080 51 Variance27.342.550. Mean 27118.778.58 34 51 59 91 46 66 Variance76.810.600. 2: Age Composition of WorkersAge (Years) Number Mean Mean Saving Union Fear of Pro- Gratuity Bonus (N) Hourly Hours of (%) Member-Losing vident (%) (%) WageWorkshipJob Fund (Rs)(%) (%) (%) Below 20 Mean 21 10.59 10.05 52 24 48 10 00 19 Variance42.181.850. 21-25 Mean 133 8.96 9.31 17 24 54 19 01 43 Variance20.261.930. 26-30 Mean 134 9.92 9.07 17 33 49 38 7 60 Variance30.701.780. 31-35 Mean 117 10.81 9.17 27 43 51 46 16 56 Variance31.492. 36-40 Mean 94 10.95 8.83 23 53 51 61 36 74 Variance27.161.670. 41-45 Mean 66 13.07 8.82 38 58 45 73 52 65 Variance 34.041.75 0.24 0.25 0.23Age 46-50 Mean 30 14.15 9.11 48 56 48 74 52 63 Variance 38.962.33 0.26 0.26 0.24Above 51 Mean 20 16.76 8.10 50 75 50 85 75 85 Variance52.910.
NOTESEconomic & Political Weekly january 19, 200867show less interest to migrate unless they are offered better prospects elsewhere or if they face a sudden deterioration in living conditions in the present locations with no immediate alternative options available in the neighbourhood. There may be differences between the migrant workers and those who are not in terms of wage earnings and non-wage benefits, hours of work, voice representation, fear of job loss and savings? We would also like to see whether mi-gration decreases with more earning members in the fam-ily of the concerned labourer.(7) Globalisation changes the notion of work and em-ployment under competitive capitalism. On the one hand, the so-called “labour redun-dancies” warrant drastic downsizing of the workforce in a factory. On the other, the nature of job contracts of-fered to the labourers is dras-tically changed, particularly for those who are the new en-trants to the job market. Thus new recruitments are increas-ingly on a short-duration con-tractual basis, which hardly provides any non-wage bene-fits or earned leave. The scope for voice representation in trade union activities is get-ting eroded day by day with the labour market reforms on the anvil. These legalise and institutionalise the flexible norms characterised by the easy hire and fire policy of the employers. We would try to figure out whether entry-level young workers encounter a much more uncertain future in comparison with workers who have entered the labour force in the past and whether the above is reflected in sig-nificant divergences between the entry level workers (with age up to 25 years) and the other workers, in terms of wages, working hours, non-wage benefits, voice representation. (8) Divergent growth pat-terns of different industries at the disag-gregated level influence labour features in the respective industries. These affect average earnings, average working hours, voice representation, and non-wage com-ponents of earnings, savings and fear of losing jobs. (9) SEZ workers are more hard pressed than their non-SEZ counter-parts, again in terms of hourly wage lev-els, hours of work, savings, voice repre-sentation (union membership), fear of losing job, non-wage benefits such as provident fund (PF), gratuity and bonus. TheseSEZs are set up as enclaves where production units officially enjoy special incentives, tax concessions and the right to have flexible labour rules. It has been held that the primary concerns for setting a unit in the SEZ is the relaxation in labour laws of the land. It is also held that SEZs provide tax havens which attract many business firms. While these may be true, our primary concern is to explore whether SEZ workers are more under duress than their non-SEZ counterparts. (10) Trade unions provide ability for voice represen-tation, which had been a part of the con-ventional labour rights. These institutions provide an organised base to workers to vent their protests when situations de-mand it. But with the introduction of a flexible labour market and with shifts from Taylorist types of production processes in the post-globalisation era, the significance of trade unions has rapidly eroded. With declining unionisation, particularly among the new workers and the new pro-duction lines (initiated by foreign capital, SEZ, and con-tractual casual appoint-ments), we can meaningfully group workers according to whether they are members of trade unions or not. We would try to find if the non-members face harsh terms and conditions of work including wages, hours of work and other relevant as-pects of job contracts. Also we look intotheirsavings propensities.The 10 attributes men-tioned above provide us the possibilities of grouping workers under the respective heads in terms of a binary classification. This will in-clude all 615 workers we have interviewed in differ-ent industries located in dif-ferent parts of the country. We provide in the next sec-tion the results of our exer-cise in arriving at the classi-fication of workers in specific groups.2 Grouping of Workers The overall picture of the surveyed areas taken together is contained in Table A1 (p 72) in the appendix. It shows that of the 615 workers interviewed, 271 were permanent workers with tenured job con-tractswitha fixed age of retirement and 344 were casual or contractual on a short-term basis withtemporaryattach-ments to the current jobs. The sharp con-trast between the two groups of workers is visible in the wage gaps, with the average hourly wages for all workers, (the perma-nent workers and the casual) at Rs 14.46, Rs 18.77 and Rs 11.07, respectively. The Table 3: Education NumberMeanMeanSavingUnionFearofPro-GratuityBonus (N) Hourly Hours of (% ) Member-Losing vident (%) (%) WageWorkshipJob Fund (Rs)(%) (%) (%) Illiterate and literate Mean6812.449.26313859321857 Variance47.212.560. Mean547 14.71 9.05254149 462158 Variance65.251.790. 4: Migration NumberMeanMeanSavingUnionFearofPro-GratuityBonus (N) Hourly Hours of (%) Member-Losing vident (%) (%) WageWorkshipJob Fund (Rs)(%) (%) (%) Non-migrant Mean30815.328.75 24 47 554831 65 Variance79.731.550. Mean307 13.60 9.39 27 3446410951 Variance46.302. 5: Social Background NumberMeanMeanSavingUnionFearofPro-GratuityBonus (N) Hourly Hours of (%) Member-Losing vident (%) (%) WageWorkshipJob Fund (Rs)(%) (%) (%) Others Mean29113.819.35263749381250 Variance57. Mean324 15.05 8.82 254352 5028 65 Variance68.941.590. 6: Union Membership NumberMeanMeanSavingFearofPro-GratuityBonus (N) Hourly Hours of (%) Losing vident (%) (%) WageWorkJob Fund (Rs) (%) (%) Non-member Mean 367 13.29 9.40 0.26 0.65 0.37 0.04 0.48 Variance7.101.510.440.480.480.200.50Union-member Mean 248 16.19 8.58 0.25 0.29 0.56 0.44 0.73 Variance 8.87 0.94 0.440.45 0.50 0.500.44
NOTESjanuary 19, 2008 Economic & Political Weekly68Table 7: Labour in Industries Producing Importables NumberMeanMeanSavingUnionFearofPro-GratuityBonus (N) Hourly Hours of (%) Member-Losing vident (%) (%) WageWorkshipJob Fund (Rs)(%) (%) (%) Importable Mean 15.41 9.790.3 0.070.430.130.070.3415.41 Variance65.931.900. Mean14.268.920.250.470.520.510.230.6314.26 Variance63.04 1.740.18 0.25 0.25 8: Labour in Exportable Industries NumberMeanMeanSavingUnionFearofPro-GratuityBonus (N) Hourly Hours of (%) Member-Losing vident (%) (%) WageWorkshipJob Fund (Rs)(%) (%) (%) Exportable Mean 18514.458.97 34 48 42 5332 72 Variance 74.691.96 0.23 0.25 0.20Others Mean430 14.47 9.11223754411552 Variance 74.691.96 0.23 0.25 0.20Table 9: Labour in the Context of the Structure of Industry NumberMeanMeanSavingUnionFearofProvidentGratuityBonus (N) Hourly Hours of (%) Member-Losing Fund (%) (%) WageWorkshipJob (%) (Rs)(%) (%) Capital-intensive industries Mean 471 14.74 9.24 27 39 49 40 17 51 Variance65.612. Mean14413.548.53214656583380 Variance56.650.870. who are also unskilled get mar-ginalised in comparison with the relatively educated ones having some skill. In our survey, we found very few completely illi-terate; some basic level of literacy (study-ing up to at least the fourth standard) is visible among those interviewed. In our sample skilled workers (judged in terms of education above the basic minimum of eighth standard) are better off than the unskilled workers in having a better economic status. Possibly, the evolving post-reform industri-al situation is creating more space for skill absorption and less for the unskilled. Again, the differences speak for the differentiated labour force, with the unskilled having fewer access to the basic amenities open to the skilled. (d) Migration: Grouping the sample of workers according to their migratory status we find that migrant workers receive less as wages, work for more hours, are hardly unionised, and receive less of non-wage benefits as compared to workers who do not mi-grate. It is also found that the migrant workers are mostly casual and the fear of losing their job is naturally greater amongst them.(e) Social Background: Workers in our sample can further be grouped in terms of their social background. We observe that the “general category” workers (which include all workers except the SCs, STs andminorities) are relatively better placed. However we did not find caste playing an important role at the time of recruitment in the private sector. But SCs, STs, and minorities come with a back-ground, which adversely affects their education and skill. Hence, at a time whenthe demand for skilled labour is wage gap of Rs 7.70 between the perma-nent and casual workers is statistically sig-nificant at the 1 per cent level. While 40 per cent of the 615 workers are union members, as many as 51 per cent of them are employed on a permanent basis. Thus, union presence is relatively more among the permanent workers.1 Workers on an average work for 9.06 hours a day, which is above the stipulated eight hours a day. Permanent workers work for 8.58 hours a day, whereas casual workers work 9.45 hours a day. Nine-ty per cent of the workers are literate or have some education with their mean schooling at five years. Among them, 40 per cent are permanent workers and 60 per cent are casual work-ers. The incidence of migra-tion is most pronounced among the casual workers because of the temporary nature of their job contracts and low earning below the level of the minimum wages prevailing in many industries in different locations. The social caste categories of workers also do matter in terms of earn-ings. The 324 workers who are on a general category earn Rs 1.24 more per hour than the non-general category of workers (291). The former category also work 0.53 hours less on an average than the latter.The references, as above, to workers in our sample when grouped according to specific attributes indicate their vulnera-bilities, both at an aggregative level and in terms of the specificity within the respec-tive groups, each centred on a specific at-tribute. We provide below the details of the exercise, which speaks of the differen-tiation among workers within each group. Groupings are done according to specific attributes of workers, which include job tenures (permanent/casual), age of workers, education level (skilled/unskilled), migra-tory status, social background (SC, ST, OBC) and the pattern of industry in terms of trade orientation (export/import inten-sity), factor intensity (labour/capital in-tensity). SEZ and otherwise and, finally, labour absorbed in different industries at the two-digit level of classification. Workers in each group are further sub-divided, under each of the seven to eight heads which indicate the economic statusof the workers in terms of wages and other amenities.(a) Job Contracts (Permanent or Casual): Table 1 (p66) indicates the casual and permanent worker divide. As expected, casual workers are more hard pressed than the permanent and regular workers in every respect, in terms of wages, hours of work, PF and gratuity. They are natu-rally insecure about their jobs and have less to do with union membership.(b) Age-Wise Distribution: Our sample does not clearly indicate that the entry point workers (age up to 25) are worse off than the workers in higher age groups. In fact, workers below 25 years, receive a higher hourly wage as compensation for working longer every day. But unionisation among the entry group of workers is muchless and they are mostly deprived of non-wage benefits like PF, gratuity and bonus. (c) Educational Level and Skills: Educa-tion plays a crucial role in skill formation. The economic status of the workers in our sample varies with their level of education. As can be expected, the less educated
NOTESEconomic & Political Weekly january 19, 200869Table 10: Labour in the Context of Varying Wage-Salary Components and Output NumberMeanMeanSavingUnionFearofPro-GratuityBonus (N) Hourly Hours of (%) Member-Losing vident (%) (%) WageWorkshipJob Fund (Rs)(%) (%) (%) SD Mean51114.529.030.26680.360.520.430.21 Variance63.451.690. Mean4816.358.980.29260.690.420.690.35 Variance116.432. Mean5612.319.500.1660.520.430.390.00 Variance15.183.310. 11: Labour in SEZ and Non-SEZ Areas SampleMeanMeanSavingUnionFearofPro-GratuityBonus Size Hourly Hours of (%) Member- Losing vident (%) (%) WageWorkshipJob Fund (Rs)(%) (%) (%) Non-SEZ Mean55514.969.02284048452261 Variance66.241.780. Mean609.889.502 4073375 28 Variance63.681.880. Our findings are similar to other work in the area based on secondary data [Panchmukhi and Das 1999; Panchmukhi et al 2004]. It is thus found that our analysis based upon a primary sample of 615 work-ers does corroborate to the conclusion drawn in those studies regarding the in-significant impact of trade in the post- reform period on labour in trade-oriented industries vis-à-vis those in the non-trade oriented industries.(h) Structure of Indus-tries: Economic reforms have had significant ef-fects on the technological structure of industries, and especially so in indus-tries which adopt labour displacing technologies. This has been pointed out in many studies [Chaudhuri 2002; Panchmukhi 2000; Panchmukhi and Das 1999; Panchmukhi, Das and Ku-mar 2004; Sharma 2004]. This it has been held that “...The surge in competitive pressures prompts enterprises to focus more and more on efficiency con-sideration which forces them to cut their overall costs of production. Minimisation of labour costs is often a natural response in such a situation” [Panchmukhi, Das and Kumar 2004]. Consequently, adoption of labour displacing technologies becomes a preferred option for the entrepreneurs: “…IfFDI inflows assume more importance, there could be an intensification of this tendency as multinationals would gener-ally bring in technologies of this nature. Therefore, in the age of heightened con-sciousness for quality and competitive-ness, a rise in unemployment becomes a misgiving of the modernisation process” [Agarwala, Kumar and Riboud 2004].In our analysis, we have identified two groups of industries – capital-intensive and labour intensive. In terms of our estimates, an industry showing a ratio of 1.03 or more capital to labour is identified as capital-intensive and the rest as labour-intensive. Thus defined, capital-intensive industries, at a two-digit level include basic metal (27), chemical (24), comput-ing (30), paper (21), electrical (31) rising, it is quite plausible that the “others category” of workers are losing out.(f) Union Membership: We next group the workers according to whether they are unionised or not. Our data indicates that while unionised workers put fewer hours of work per day they also receive lower hourly wage. It is also found that for the unionised members the per-centage with the fear of job loss is higher than those for the non-unionised workers. Even in terms of non-wage benefits non-unionised workers are better off than the unionised. It seems to indicate that voice representation had almost no effect in improving labour sta-tus for workers in the sample. (g) Trade Orientation of Industries: Trade reform is the integral part of economic reform programmes in India with its two-pronged thrusts on export promotion and im-port liberalisation. The first pertainsto gaining a competitive edge for Indian goods in the global markets while the second is geared to achieve cost-compet-itiveness for Indian industry by permit-ting free imports of inputs from abroad. Trade liberalisation measures started off by the mid-1980s while FDI flows have been also made much easier since then. Indian firms with foreign collaboration as well as those set up by the MNCs as sub-sidiaries today rely heavily on raw materi-als and technology, mostly imported from their foreign subsidiaries and/or parent firms abroad. The above limitstheback-ward linkage effects of these firms in the domestic economy [Panchmukhietal 2004]. Against this backdrop, we can iden-tify certain domestic industries which com-pete with the finished and semi-finished products imported from abroad. Export intensive ones can be defined as those having 10 per cent or more of their sales as exports and import intensives with share of importables at 10 per cent or more as a proportion of their sales. These industries are classified at the two-digit level of clas-sification, as indicated in two Tables (7 and 8, p 68). In the areas covered, we could identify computing (30), wood (20), pharmaceutical (35), machinery (29), fur-niture (36) and paper (21) as industries producing importable items. The rest are non-importable.2 Exportable industries in-clude food and beverage (15), textile (17), leather (19), chemical (24), computing ma-chinery (29) and gems jewellery (36) all of which export a certain proportion (20 per cent or above) of output. Table 7 delineates the conditions of labourers, according to whether they work in importable or non-importable industries. While the hourly wage rate happens to be relatively higher in industries producing importables, the average working hour is also higher. De-spite a lower percentage of unionisation, workers in the above industries have less to fear in terms of losing jobs while receiv-ing non-wage benefits, which are lower compared to those engaged in non-import-able goods industries. On the whole, work-ersengagedin industries producing im-portables seem to be marginally better off as compared to others. Possibly, these industries are better organised and more competitive in the home market as com-pared to others and are thus able to offer jobs at slightly better terms. Labourers in exportable industries however, are not much better off as com-pared to labourers engaged in non-export-able industries (Table 8). Export orienta-tion of industries has thus not been to the benefit of the lot of the labour engaged in these industries. Thus trade orientation of industries seems to have hardly an impact on the economic status of workers engaged
NOTESjanuary 19, 2008 Economic & Political Weekly70machinery (29), motor vehicles (34) and electronics (32) while labour-intensive ones are food and beverages (15), textiles (17), wearing apparel (18), leather (19), paper (21), chemicals (24), rubber and plastic (25), non-metallic mineral (26) and fabricated metals (28). In terms of the em-ployment pattern, roughly 30 per cent of workers seem to be with the capital-inten-sive industries where the wage rate on an average is relatively higher and workers put in more labour hours per day as com-pared to others who are employed in the labour-intensive industries. The appropri-ation of surplus labour, therefore, takes place through both labour displacing tech-nological changes as well as by increases in average work time. However, while la-bourers in the capital-intensive industries receive higher wages than those in the labour-intensive groups the second group receive relatively more of the non-wage benefits, whatever these are. However, despite a higher rate of unionisation, workers in these labour-intensive industries are found to be subject to higher de-grees of fear in terms of losing their jobs. From the above it appears that industries which are going in for more capital-intensive technolo-gies are offering higher wages and lower non-wage benefits to their workers as compared to the labour-intensive industries. The new recruitments in these capital-intensive hi-tech indus-tries are mostly on a contractual basis and because of this, the proportion of non-wage benefits are naturally lower. Capital- intensive technologies require more skilled work effort and hence wages tend to be higher in these industries in relation to the wages offered in the labour-intensive industries. In our survey, we also found that workers in capital-intensive technologies who can save are more common than what in the labour-intensive ones, an out-come, once again, that is related to the relative wage levels in the two industries. However, in the final analysis with an increasing number of industries adopting capital-intensive lines of production, the labour content of output may tend to go down further,thus creating more pressures in the labourmar-ket in terms of unemployment. We further classify industries in terms of changing labour use, which is defined as the ratio of wages and salaries to output net of wages and salaries. In a similar study [Panchmukhi and Das 1999] the notion has been identified as registering labour intensity in the liberalisation period. The post-reform period registers declines in the above ratio in our sample for all industry groups. We have identified three categories of industry groups – those with steep declines in the ratio (SD), those with moderate declines(MD) and rest with an increasing trend (INC). We notice from Table 5 (p 67) that while the hourly wage on an average has been less, the working hours have been relatively more in these SD units when one compares these to the MD andINC units. Labour displacement has thus gone hand in hand with a wors-ened labour status for these 511 workers employed with theSD units, which also speaks for the majority of workers in our sample. As for union membership, it is surprising that the SD workers are better organised, which also helps them to have better non-wage benefits and less fear of losing jobs. The increased union member-ship is difficult to reconcile in the context of post-reform attempt to flexibilise labour market rules and regulations. However, the percentage of workers with savings is highest inMD category. This may be related to the higher earnings as wages.We can also distinguish the workers in our sample in terms of their age so as to differentiate between entry-level workers with other workers in the sample. A fur-ther grouping is made in terms of migration, social back-ground, education level and in-dustry-wise variations. (i)Labour in SEZs or Other Industries: As we have men-tioned earlier, of the 16 areas selected for interviewing indus-trial labour, three wereSEZs. These included Falta in West Bengal, NOIDA in the national capital region of Delhi (which is actually located within the ad-ministrative jurisdiction of Uttar Pradesh) and the Santa-cruz SEEPZ at Mumbai in Maharashtra. Of the 615 workers in our sample, only 60 belonged to these threeSEZ areas. Industrial units set up within aSEZ need not pay the minimum wages as prevail in industries located in the neigh-bourhood of theSEZs. InSEZs, labour laws as well as taxation norms of the land are not appli-cable. Flexible hireand fire practices, therefore, are even easier to implement. The above further deprives labour its due shareofproduction in terms of both wage and non-wage benefits as well as with other Table 12: Labour in Terms of Industrial GrowthIndustry AAGR Number Mean Mean Saving Union FearofGratuityBonus Code (%) (N) Hourly Hours of (%) Member-Losing (%) (%) ASI WageWork shipJob (Rs) (%) (%) 34 15.97Mean 2014.318.55 20 60 70 4075 Variance45.160.26172522252036 15.70 Mean 6613.74 10.17 39 5 41 3 32 Variance 32.08 1.59244 253 2228 14.92 Mean 12 9.62 8.42 25 58 33 8 75 Variance28.67 0.27 2127 248 2118 14.88Mean 56 9.549.50 16 52 43 032 Variance7.663.3114252502225 11.66Mean 69 7.569.22 6 49 68 1242 Variance17.072.5862522102526 9.31Mean 1011.178.40 20704050100 Variance 35.761.60 18 232728 019 9.05Mean 1513.339.13 4713402780 Variance32.991.70271226211735 8.62Mean 2011.648.15 306510040100 Variance19.090.242224025024 8.51Mean 789.368.31 2649543885 Variance 33.690.48 19 25 25241317 6.96Mean 5610.189.73 4539251648 Variance18.022.56252419142529 6.64Mean 4110.699.20 15 10461537 Variance 55.50 1.86139 26 132431 6.19Mean 6412.758.48 42 42 422564 Variance 42.720.25 25 25 25192327 6.07Mean 4010.608.68 2042 632577 Variance15.600.33162524191821 5.85Mean 166.679.31 025 631350 Variance 6.79 3.03 0 20 25 12 2715 5.84Mean 3612.449.17 31 72444481 Variance 57.69 2.60222125251622 2.51Mean 1610.29 9.00 0 1969 0 38 Variance 12.59 0.000 16230 25
NOTESjanuary 19, 2008 Economic & Political Weekly72even more, in terms of long hours of work, casual status and other related aspects as follow. Skill, as judged by education beyond the basic level, compensates to some extent the earnings of workers and related aspects. Those with job skills as well as those who are young as compared to other workers seem to be subject to the changed work atmosphere of contractual and casualised recruitment, which offers very little of the non-wage benefits (PF, bonuses) or opportunities to participate in union activities. Workers with a migratory and/or casual status (which often go together) as results from a lack of job opportunities and/or uncertain job situa-tions are naturally subject to worse prospects. As for industries of higher capital-intensity, the higher output growth that results is matched by longer working hours and higher wages (but less or none of other benefits) as compared to what prevails in labour-intensive indus-tries. The pattern is similar for the rela-tively younger workers (age less than 25) who seem to be relatively well off in terms of wages, but lack opportunities in terms of non-wage benefits and trade union participation.Our survey thus throws light on the new generation of workers in India, young, casualised, with no options for trade union activities, which could provide a bit of bargaining power to these people to fight for their due share in industry. Not much difference can be noticed with workers having permanent jobs in this day of labour flexibility. In capital-intensive industries with higher growth, presuma-bly with higher labour productivity, labour employed is both displaced and expropriated, with wages disproportion-ately low as comparedtotheirper-formance which includelongworking hours. We also have records from theSEZ areas rated highly as lead sectors of the economy, where labour is even more ex-propriated. Nor are the workers better off when industries are generally trade- oriented, especially in terms of export orientation.With increased casualisation under labour market flexibility, with use of labour displacing technology and en-hanced work pressure, on average, in high growth industries, there appears to be a steady deterioration in the well-being of labour in the ageofcompetitive capitalism. Clearly it is labour which bears the brunt of structural adjustments under economic reforms in order to make room for capital.Notes 1 During the course of the survey, we got the im-pression that unionising casual, contractual or temporary workers is more difficult than unionis-ing permanent workers as the former category of workers are footloose in nature; they frequently move from one job to another in the absence of any long-term contract with their employers unlike the permanent workers. 2 The list of industries at the two-digit level inwhich 615 workers interviewed by us includes food and beverages (15), textile (17), wearing apparel (18), leather (19), wood (20), paper (21), printing, etc (22), chemicals (24), rubber and plastic (25), non-metallic mineral (26), basic metals (27), fabricat-ed metals (28), machinery (29), computing (30), electrical (31), motor vehicles (34), other trans-port (35) and furniture which icludes gems and jewellery (36).ReferencesAgarwala, Ramgopal, Nagesh Kumar and Michelle Riboud (eds) (2004): Reforms, Labour Marketsand Social Security in India, Oxford University Press.Annual Survey of Industries(various issues): Central Statistical Organisation, Government of India.Chaudhuri, Sudip (2002): ‘Economic Reform and Industrial Structure in India’,Economic & Political Weekly, January 12, pp 155-62.Panchmukhi, V R (2000): ‘Trade, Technology and Em-ployment: A Profile of Systemic Dilemmas and Paradoxes’,The Indian Journal of Labour Econom-ics,43(1).Panchmukhi, V R and Ram Upendra Das (1999): Economic Reforms, Regional Integration and La-bour Markets in the SAARC Region, ILO-SAAT, New Delhi.Panchmukhi, V R, Nagesh Kumar and Ram Upendra Das (2004): ‘Economic Reforms and Implications for Labour Markets’ in Ramgopal Agarwala, Nagesh Kumar and Michelle Riboud (eds), Reforms, Labour Markets, and Social Security in India, Oxford University Press. Sen, Sunanda and Byasdeb Dasgupta (2006): ‘Political Economy of Labour under Globalisation: A Study of Labour in India’s Manufacturing Sector’ (mimeo).Sharma, Alakh, N (2004): ‘Employment Generation Policy and Social Safety Nets in India’ in Ramgopal Agarwala, Nagesh Kumar and Michelle Riboud (eds),Reforms, Labour Markets, and Social Security in India, Oxford University Press. Standing, G (1999): Global Labour Flexibility – Seeking Distributive Justice,MacMillan Press.Table A1: Distribution of Sample according to State, Area and Worker’s TypeState Area WorkerNumberDelhi EastDelhiCasual 5 Permanent 9 Total 14 Mayapuri Casual 11 Permanent 30 Total 41 Okhla Casual 19 Permanent 19 Total 38 Total Casual 35 Permanent 58 Total 93Gujarat Surat Casual 64 Total64Haryana FaridabadCasual 2 Permanent 6 Total 8 Gurgaon Permanent 11 Total 11 Total Casual 2 Permanent 17 Total 19Maharashtra Mumbai Casual 25 Permanent 22 Total 47 Total Casual 25 Permanent 22 Total 47Uttar Pradesh Ghaziabad Casual 5 Total 5 Noida Casual 42 Permanent 16 Total 58 Noida SEZ Casual 9 Permanent 8 Total 17 Total Casual 56 Permanent 24 Total 80West Bengal Falta Casual 26 Permanent 17 Total 36 Hooghly Casual 3 Permanent 16 Total 19 Howrah Casual 24 Permanent 5 Total 29 Kalyani Casual 57 Permanent 64 Total 121 Kolkata Casual 52 Permanent 48 Total 100 Total Casual 162 Permanent 150 Total 312All states in All areas in Casual 344 thesample the sample Permanent 271 Total 615State Area WorkerNumberState Area WorkerNumber

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