http://www.epw.in/perspectives/micro-political-economy-gains-unorganised-workers-india.html
Vol - XLIX No. 9, March 01, 2014 | Barbara Harriss-White and Valentina Prosperi
This review of literature looks at the micro-political mechanisms through which unorganised labour makes gains in wages and conditions of work, in a context of real wage rises since about 2005 and the ubiquity of informal labour contracts. It examines the micro level impact of demand and supply factors, the pressures on employers to concede to demands and the various methods used by labour to push its positions.
The Micro Political Economy of Gains by Unorganised Workers in India
Barbara Harriss-White, Valentina Prosperi
This review of literature looks at the micro-political mechanisms through which unorganised labour makes gains in wages and conditions of work, in a context of real wage rises since about 2005 and the ubiquity of informal labour contracts. It examines the micro level impact of demand and supply factors, the pressures on employers to concede to demands and the various methods used by labour to push its positions.
The authors are grateful to Judith Heyer, Gautam Mody, D N Reddy and M Vijayabaskar for discussions and comments. The research is part of the project, “Resources, Greenhouse Gas Emissions, Technology and Work in Production and Distribution Systems: Rice in India (Res-167-25-Mtruyg0; Es/1033768/1)” funded jointly by the UK’s Economic and Social Research Council and the Department for International Development. Views expressed here are of the authors’ only.
Barbara Harriss-White (barbara.harriss-white@qeh.ox.ac.uk) is a senior research fellow in the Contemporary South Asian Studies Programme, Oxford University, the UK. Valentina Prosperi is with Rome University, Italy and a labour consultant.
Since the era of globalised capital has not vanquished poverty or secured decent work conditions for the vast mass of workers (Hensman 2010) the “perverse” question we try to address here is how un-unionised workers in the unorganised or informal economy improve their wages and other aspects of the terms and conditions of work.
Our starting point is that India’s informal economy is the actually existing form taken by contemporary capitalism. Informal work is not residual, it is the commonest kind; it is not the reserve army or a separate “needs economy” with a non-accumulative logic,1 it is the real economy, it does not consist of “invisible others” (Chakrabarti et al 2008) – in (non-metropolitan) India it is impossible to avoid; nor are its actors forgotten – it is not so much marginalised by the state as it is the object of a mass of inadequate regulative interventions with incoherent and contradictory purposes (Harriss-White 2012). So far, the 21st century has been marked by increasing informalisation, by serious and extensive deficits in decent work (Kantor et al 2006) and by growing shares of the workforce excluded from accumulation of any sort by relations of exploitation and/or exchange (Harriss-White 2012). Despite the growth of rights-based politics, formal access to social protection has atrophied (Sharma and Arora, no date), income instability has flourished alongside an expansion of casual labour and distress-induced self-employment without access to any work rights – all indicators of deteriorating vulnerability at work. The first 21st century decade has also witnessed the sporadic forced entry and participation of women engaged in smoothing and supplementing their incomes (Corbridge, Harriss and Jeffrey, forthcoming).
The political response to this vulnerability is widely taken to be the mobilisation and organisation of informal workers (Bhalla 1999). Yet most labour experts reason that formal or organised labour is weak in India (evinced by a reduction in industrial disputes and the growing incidence of disputes confined to individual companies) and that it is unable to expand as a workers’ movement and that the working class “in itself” is unable to act as a class “for itself”. In the informal economy types of contract (regular versus casual), labour processes (subcontracting, outsourcing and homeworking), social stratification and discrimination (by locality, caste, ethnicity, religion, gender, age and health status) do not only structure the informal economy2 and differentiate returns to work, but they also make it extremely difficult to organise workers. Further, what Gooptu (2009) has termed an individualistic “enterprise culture” is seeping progressively into production relations in all sectors, further sapping collective political strength.
For the vast mass of workers, the most that the literature acknowledges is acts of everyday or “silent resistance”, for example, through squatting for home plots3 – often distinguishing the politics of poverty outside work from the politics of work itself, while workers see such acts as a seamless part of their life-world (Gooptu 2001). In the workplace there are a few noted cases of the informal organisation of workers by sector and site (e g, in the construction sector, coastal fishing and beedi wrapping) together with Self-Employed Women’s Association’s (SEWA) achievement in organising 1 million self-employed women (Jhabvala and Subramanian 2000). Even then, the point is often made that informally organised workers struggle for welfare rights rather than work rights and against the state rather than against employers (Vijayabaskar 2011; Lerche 2010).
Yet of late, in particular, since the round of National Sample Survey Office (NSSO) data gathering in 2005, wages for both regular and casual employment in the informal economy and real wages (adjusted for price inflation) appear to have bottomed out and started to increase, though until recently and through most of India their growth rates were far below the rate of growth of gross domestic product (GDP) (Chakravarty 2011; Kar 2011; Gulati and Jena 2012).
Between 2005 and 2010, the number of openly unemployed people declined (Ray 2011); real all-India average wages for casual agricultural labour were on an upward trend;4 those of women increasing by 14.6% in real terms and men at 7% between 2005 and 2010 (Gulati and Jena 2012). And, with expenditure regarded as a more reliable indicator of poverty than income, the consumption expenditure of the bottom quintile (20%) was also found to have increased over this period.5 When inflation is high and rising, nominal rates of wage increase will appear to be dramatic. While the distributive share between wages and profit continues to be adverse to labour (Allirajan 2013) and while the all-India average is known to hide significant regional differences in levels and trends, the paradox of increasing vulnerability alongside increasing real wages prompts us to seek to understand how vulnerable, un-unionised workers make gains at work in the informal economy.
The question is not confined to academic interest but is of some practical relevance to labour organisations, possibly to employers and certainly to informal workers themselves.
Method
Beyond the abstractions of labour supply facing greater demand, however, and beyond the impact of state interventions on raising the reservation floor for wages, there is no theory, even of an institutional kind, to guide the search for answers. We therefore examine these conventional approaches first; and then turn to summarise a scoping review of the Indian literature on the political economy, institutions and practices of informal labour gains.6
Macro-Level Explanations
(1) Demand for Labour: Where the non-farm economy has flourished (as in northern Tamil Nadu, Harriss-White and Janakarajan 2004) and/or sectors are booming (notably in construction throughout India, Prosperi, forthcoming) and/or demand for specific skills rises (e g, in the handloom silk industry in south India, Roman 2008), and where transport and communications infrastructure has reduced the transaction costs of work and widened local fields of labour supply through commuting (Carswell and De Neve 2013), real wage gains to labour have been recorded.
In the agricultural economy, higher agricultural product prices, when not matched by higher bio-chemo-mechanical input prices, have been found to enable higher agricultural wages to be conceded, irrespective of the effects of the Employment Guarantee Scheme and the real wage effects on net consumers (Rao 2011).
Where a new technology enhances net labour demand (as is said to have happened in the case of Bt cotton), other things being equal, agricultural wages have also been found to have risen (Subramanian and Qaim 2010).
But the literature on these gains is content to stay at the level of description; it does not account for the micro-political means whereby these real wage increases have been gained.
(2) The State and Supply: While the International Labour Organisation caught the world’s attention by developing the concept of “decent work” – involving rights to work, at work, to labour organisation (or dialogue) and to social security, far less attention has been paid to forms of political mobilisation which could actually secure decent work rights. In India in late 2005, a significant concession was secured through an employment guarantee that grants 100 days of work (in practice about half of that) to all self-selected work-seekers at levels of pay at or above the local minimum wage (Reddy and Upendranath 2009). If confined to the rural slack season this intervention has income smoothing effects. When clashing with peak agricultural demand, by being an alternative it has the potential to set a wage floor. There is a sharp and inconclusive debate over the varied local effects of the employment guarantee. At less than 1% GDP it can hardly drive national wage-rate gains. Gaiha (1997) records supportive effects on slack season agricultural wages. In three states of India studied by Reddy and Upendranath (2009) there was significant female participation in the National Rural Employment Guarantee Act (NREGA) work when due process was fair and minimum wages on the scheme exceeded agricultural wages (Reddy et al 2010). In rural Tamil Nadu, Heyer (2012) has observed employers’ willingness to follow the rises in NREGA rates under conditions when not matching NREGA pay affects the supply of labour.
The employment guarantee can be seen as a component of a slowly emerging and fragile welfare state. The public distribution system (PDS) is the oldest and central element of this bundle of policies – developing from 1965 and actually strengthening its performance in the current era – amid criticism and proposals for alternatives (Khere 2011). A national social assistance programme was put before Parliament in 1995 (Justino 2003). Social security bills for informal workers were placed in the Lok Sabha (Parliament) in 2008; a (much debated) food security bill in 2012 and there is expert as well as public mobilisation for wide reforms to health and education. Threatened by the policy turn towards cash transfers and vulnerable to the health of the budget, this skeletal welfare state aims to improve conditions outside work and compensate those incapable of working.
Its impact on wages and working conditions in the informal economy is thought to be traced indirectly – first through expanding the capacity of workers to withdraw from the most degrading and oppressive conditions of work to devote time to other aspects of domestic work, to themselves, childcare (Heyer 2011a and 2011b) or education (Prosperi forthcoming) and second through notable improvements in the respect paid to labour through the language and idioms of work.7 At the same time, in failing to address work conditions and focusing on welfare outside work, this suite of interventions does nothing if not legitimate informal labour. One hypothesis needing further exploration across the federation of Indian states is that the extent to which the state assumes the role of patron and develops a welfare state is related positively to gains in informal sector wages.8
These state welfare rights are being secured in a vulnerable and drawn-out process involving civil society movements and academic activism together with left party pressure whenever this is politically possible. They have not been secured directly by informal workers themselves. And both the political and the analytical framing of gains is confined to the wage level – no other aspect of work is well-addressed.
So the macro-level literature shows that the question of the tactics and institutions through which gains are secured is a general question that requires micro-level and detailed, context-rich research for its answers.
Micro-Level Explanations
Moving beyond descriptions of levels and trends, demand and supply, we first examine explanations involving action by employers before turning to employees.
Employers’ Trusteeship: CSR: Pressurised by campaigns on the part of consumers and civil society representatives, highly selective and limited improvements in labour standards have been imposed on informal producers by registered global companies under “CSR” (Ruthven 2008). Case studies documents elaborate evasive tactics as well as strategically selective success (Samy and Vijayabaskar 2006). In the case of IKEA for example, gains have been made in health and safety and in environmental standards. But the IKEA workforce’s own demands reflect different priorities (e g, lack of overtime pay and undercutting by contract labour) and these have not been addressed under CSR. Rights to organise have not been honoured, nor has social discrimination in the workplace been countered (Prosperi 2010; forthcoming).
Patronage and Paternalism: Increasingly daily wages are being replaced by piece rates and, though the practice is still not widespread, farmers’ own searches for labour are being outsourced to labour contractors. There is a growing literature on the hold of contractors over agricultural – especially migrant – labour (Breman et al 2009) but labour contractors are now spreading through the informal economy. In a case from the construction industry, Prosperi found contractors able to discriminate in wages between individual gang members, based on personal relations of loyalty, reliability and trust. With power to divide the workforce, they may concede gains to individuals at the expense of the collective. Some gang labour has been found to be seasonally bonded. Gangmasters may also organise housing, food, healthcare and communication for groups of migrant labour, though this is certainly not a common occurrence (Harriss-White 2010; Picherit 2009). The extent to which they mediate claims with employers on behalf of labour awaits a dedicated study of contractors.
The body of evidence about employers’ actions invokes cause and effect, mostly by inference. Gains to labour are not conceived as a micro-political struggle.
Employees’ Assets and the Role of Self-Employment: In a closely observed case study of women’s work in rural Andhra Pradesh, Garikipati shows that the ownership of assets relates to stronger bargaining power. She argues that this results from self-employment being an alternative to wage work. Indeed experts on labour often see self-employment as “good quality work” (Sundaram 2007) since the distribution of earnings from self-employment has a higher and longer right-handed tail than that from wage work and since autonomy is found to be a valued attribute of work (Ruthven 2008; Chandrasekhar and Ghosh 2007). The “shift to self-employment” is conceived as a gain in work quality rather than as a form of production or trade generating an opportunity to accumulate.
In fact, while it is true that self-employment is now the commonest form of work in India accounting for 53% of the workforce,9 much evidence shows it to be propelled by the compulsions of poverty rather than entrepreneurial prospects for accumulation. Self-employment may be understood as self-exploitation, or undertaken part-time or in slack seasonal employment troughs. Or it is the preserve of women returned to homeworking after a period (1999-2005 judging by the labour statistics) spent in wage work as a result of agricultural distress (Corbridge, Harriss and Jeffrey, forthcoming).
It is a matter of some importance that self-employment is classified by labour economists and lawyers alike as “disguised wage labour” because with no consensus on its terminology, self-employment/petty production/own account enterprise/micro-enterprise cottage industry/the tiny sector, etc, is consensually interpreted as a positive shift in the terms, conditions and returns to labour.
In fact, there appears to be a continuum of forms of self-employment from hardly disguised wage work to complete autonomy. Its distinctiveness takes several forms: first, while labour is exploited on labour markets, self-employed workers can be exploited on (rental) markets for property, raw materials, money and finished products – they may shift the balance of power towards them in exchange relations on four markets (contracts may shift adversely too). Second, self-employed people can operate a distinctive logic of super-exploitation or super-efficiency in which production is maximised rather than (marginal) productivity (in which improvements would be indicated, perversely, by reductions in production). Third, exchange relations contrive to prevent accumulation and self-employment expands instead by multiplication; so the question whether an expansion in self-employment is an indication of social gains to labour or rather a signal of the power of relations preventing accumulation (or both) is an open one. Fourth, self-employed workers are disenfranchised in labour law when they cannot identify a single employer against whom to bring a grievance to court (the multiple exchange relations in which the self-employed are entangled making this impossible).
The possession of assets may make it possible to bargain higher wages, but the turn to self-employment is not a solid indicator of gains by labour.
Migration: Migrant labour appears to bring mixed effects on labour markets. On the one hand, an increase in the supply of (compliant) labour threatens employment opportunities as well as wages of workers in the destination sector and site – worse for women than for men and worse for older rather than younger workers. On the other hand migrant labour often manages to improve wages over and above rates in the origin (Picherit 2009; Pattenden 2012). The effects of migration on migrants themselves are far from homogeneous. They may involve bondage or they may include social liberation, especially for oppressed dalit labour (Rogaly and Coppard 2003). Migration is also structured through institutions of caste, gender, locality, kinship and friendship but the literature suggests that while these relationships are vital in recruitment per se, their effectiveness in bettering work conditions is not well researched or established. As with the case of individualised relations with contractors so here with entire groups of migrants, low wages may be accepted in the interest of stable work opportunities. There is little evidence of migrants themselves attempting to improve work conditions. One case of informal labour mobilisation observed by Prosperi (2010) was a frustrated reaction to extremely delayed and non-payment of wages.
Shifts in Sector/Location: Net of migration, other shifts may result in better working conditions. Moves from agriculture to the rural or local non-farm economy, and from rural to urban work have long been associated with increased earnings (Jayaraj 2004). So much so that the local urban non-farm economy may become a segmented redoubt – barring women and low caste aspirants (Haggblade et al 2010). Entry for them is a political struggle.
Long-Term Loyalty: Case material demonstrates that, despite contractual precariousness, wages may increase with the length of service with a given employer (Prosperi 2010, forthcoming; Harriss 1981; Harriss-White 1996). On the one hand this may be a customary norm; on the other it may reflect individual skill and experience. Gains are slow and individualised. Employers may also seek to bind long-term informal employees without written contracts who they desire to retain, using loans.
Deployment of Collective Identities: In village studies in Tamil Nadu (Ramachandran et al 2001) networks and social relations among agricultural labour based upon kinship, friendship and caste are described as being deployed to raise wages and improve conditions. Unorganised labour may also organise itself by village of origin and locality (where it can restrict entry, operate a closed shop, and negotiate periodically and in the collective interest against a set of employers).10 Research in Haryana demonstrates that collective identity may be as much a structure of control as it is one of enabling and empowerment (Rawal 2006). How localised the gains achieved by the mobilisation of social identities are – and whether they are made at the expense of other groups of workers – has not been established. The dynamics of such processes have mainly been researched in the context of migration.
Conclusions
While India’s informal economy provides evidence of ongoing vulnerability, there is recent evidence for real wage gains. Yet the question of the micro-political practices by means of which gains in wages and improvements in working conditions are achieved by un-unionised, unorganised labour in the informal economy is one that does not seem to have been researched explicitly. It is also a general question whose answers have to be sought at the micro-level.
The literature of case material does not appear to be abundant. Time series or historical evidence hardly exists and the trend of all-India real gains appears to be too recent for research cycles to have been completed. To date answers have to be found between the lines of research which has other objectives. Much of the existing evidence associates certain economic conditions with certain labour-market outcomes inferring cause and effect. Even literature rich in the details of working conditions (in agriculture in particular) ignores the question of the tactics used to struggle for wage gains or for changes in non-monetary gains, such as respect.
Surprisingly little is known substantively. Relations of clientelism or loyalty may bring gains to individuals. The existence of alternative work at higher rates (state-supplied/self-employment/different sectors/different locations) with the option of not working, or not working as many days may force employers to raise wages. They then start to worry about the timing of labour supply – they may try to treat labour better – “like a bride”11 – not merely offering higher wages but also better conditions. Not enough is known about how they resist or capitulate.
Labour may organise for objectives outside work – conditioning their life-world and their reproductive space – when mobilising to improve conditions at work is currently faced with insuperable obstacles. Collective identities may be deployed in the search for work but are rarely recorded as the basis for struggles for improved conditions. If non-market forms of exchange, co-ownership, solidarity institutions, cooperative and collective practices of labour protection play roles in the securing of gains to men and women workers, they are not yet identified and recorded.
For a wide constituency of public interests, and since there is no sign of anything other than further informalisation, systematic research is needed into the means whereby informal labour reduces its vulnerabilities and achieves improvements in its working conditions.
Notes
1 See Jan’s (2012) critique of Sanyal (2007).
2 The informal economy is termed unorganised in India but it would be incorrect to argue that it is either chaotic or disorganised – quite the opposite (Harriss-White 2003).
3 In the case of Dharavi slum in Mumbai, see Mukhija (2003).
4 According to the NCEUS (2008), they had increased from Rs 34 per day in 1993-94 to Rs 43 in 2004-05.
5 Nathan and Sarkar (2012). It has subsequently dipped to a seven-year low in 2012 (http://india.nydailynews.com/newsarticle/50215dbbc3d4ca5129000005/india-...).
6 See Prosperi (2010) and forthcoming for analyses in the construction industry, garments and textiles, food processing and agriculture.
7 Heyer (2012).
8 Harriss-White (2010) reviewed literature to argue the reverse however – that even in the informal economy, work status had a major impact on access to social security.
9 This is driven by the agricultural sector and varies greatly within the non-agricultural economy. See references in Harriss-White (2012).
10 For example, marketplace porters in the town of Arni, south India: source – author’s field interviews, 2012.
11 Judith Heyer, Personal Communication (2012).
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Vol - XLIX No. 9, March 01, 2014 | Barbara Harriss-White and Valentina Prosperi
This review of literature looks at the micro-political mechanisms through which unorganised labour makes gains in wages and conditions of work, in a context of real wage rises since about 2005 and the ubiquity of informal labour contracts. It examines the micro level impact of demand and supply factors, the pressures on employers to concede to demands and the various methods used by labour to push its positions.
Barbara Harriss-White (barbara.harriss-white @qeh.ox.ac.uk) is a senior research fellow in the Contemporary South Asian Studies Programme, Oxford University, the UK. Valentina Prosperi is with Rome University, Italy and a labour consultant.
The authors are grateful to Judith Heyer, Gautam Mody, D N Reddy and M Vijayabaskar for discussions and comments. The research is part of the project, “Resources, Greenhouse Gas Emissions, Technology and Work in Production and Distribution Systems: Rice in India (Res-167-25-Mtruyg0; Es/1033768/1)” funded jointly by the UK’s Economic and Social Research Council and the Department for International Development. Views expressed here are of the authors’ only.
Barbara Harriss-White, Valentina Prosperi
This review of literature looks at the micro-political mechanisms through which unorganised labour makes gains in wages and conditions of work, in a context of real wage rises since about 2005 and the ubiquity of informal labour contracts. It examines the micro level impact of demand and supply factors, the pressures on employers to concede to demands and the various methods used by labour to push its positions.
The authors are grateful to Judith Heyer, Gautam Mody, D N Reddy and M Vijayabaskar for discussions and comments. The research is part of the project, “Resources, Greenhouse Gas Emissions, Technology and Work in Production and Distribution Systems: Rice in India (Res-167-25-Mtruyg0; Es/1033768/1)” funded jointly by the UK’s Economic and Social Research Council and the Department for International Development. Views expressed here are of the authors’ only.
Barbara Harriss-White (barbara.harriss-white@qeh.ox.ac.uk) is a senior research fellow in the Contemporary South Asian Studies Programme, Oxford University, the UK. Valentina Prosperi is with Rome University, Italy and a labour consultant.
Since the era of globalised capital has not vanquished poverty or secured decent work conditions for the vast mass of workers (Hensman 2010) the “perverse” question we try to address here is how un-unionised workers in the unorganised or informal economy improve their wages and other aspects of the terms and conditions of work.
Our starting point is that India’s informal economy is the actually existing form taken by contemporary capitalism. Informal work is not residual, it is the commonest kind; it is not the reserve army or a separate “needs economy” with a non-accumulative logic,1 it is the real economy, it does not consist of “invisible others” (Chakrabarti et al 2008) – in (non-metropolitan) India it is impossible to avoid; nor are its actors forgotten – it is not so much marginalised by the state as it is the object of a mass of inadequate regulative interventions with incoherent and contradictory purposes (Harriss-White 2012). So far, the 21st century has been marked by increasing informalisation, by serious and extensive deficits in decent work (Kantor et al 2006) and by growing shares of the workforce excluded from accumulation of any sort by relations of exploitation and/or exchange (Harriss-White 2012). Despite the growth of rights-based politics, formal access to social protection has atrophied (Sharma and Arora, no date), income instability has flourished alongside an expansion of casual labour and distress-induced self-employment without access to any work rights – all indicators of deteriorating vulnerability at work. The first 21st century decade has also witnessed the sporadic forced entry and participation of women engaged in smoothing and supplementing their incomes (Corbridge, Harriss and Jeffrey, forthcoming).
The political response to this vulnerability is widely taken to be the mobilisation and organisation of informal workers (Bhalla 1999). Yet most labour experts reason that formal or organised labour is weak in India (evinced by a reduction in industrial disputes and the growing incidence of disputes confined to individual companies) and that it is unable to expand as a workers’ movement and that the working class “in itself” is unable to act as a class “for itself”. In the informal economy types of contract (regular versus casual), labour processes (subcontracting, outsourcing and homeworking), social stratification and discrimination (by locality, caste, ethnicity, religion, gender, age and health status) do not only structure the informal economy2 and differentiate returns to work, but they also make it extremely difficult to organise workers. Further, what Gooptu (2009) has termed an individualistic “enterprise culture” is seeping progressively into production relations in all sectors, further sapping collective political strength.
For the vast mass of workers, the most that the literature acknowledges is acts of everyday or “silent resistance”, for example, through squatting for home plots3 – often distinguishing the politics of poverty outside work from the politics of work itself, while workers see such acts as a seamless part of their life-world (Gooptu 2001). In the workplace there are a few noted cases of the informal organisation of workers by sector and site (e g, in the construction sector, coastal fishing and beedi wrapping) together with Self-Employed Women’s Association’s (SEWA) achievement in organising 1 million self-employed women (Jhabvala and Subramanian 2000). Even then, the point is often made that informally organised workers struggle for welfare rights rather than work rights and against the state rather than against employers (Vijayabaskar 2011; Lerche 2010).
Yet of late, in particular, since the round of National Sample Survey Office (NSSO) data gathering in 2005, wages for both regular and casual employment in the informal economy and real wages (adjusted for price inflation) appear to have bottomed out and started to increase, though until recently and through most of India their growth rates were far below the rate of growth of gross domestic product (GDP) (Chakravarty 2011; Kar 2011; Gulati and Jena 2012).
Between 2005 and 2010, the number of openly unemployed people declined (Ray 2011); real all-India average wages for casual agricultural labour were on an upward trend;4 those of women increasing by 14.6% in real terms and men at 7% between 2005 and 2010 (Gulati and Jena 2012). And, with expenditure regarded as a more reliable indicator of poverty than income, the consumption expenditure of the bottom quintile (20%) was also found to have increased over this period.5 When inflation is high and rising, nominal rates of wage increase will appear to be dramatic. While the distributive share between wages and profit continues to be adverse to labour (Allirajan 2013) and while the all-India average is known to hide significant regional differences in levels and trends, the paradox of increasing vulnerability alongside increasing real wages prompts us to seek to understand how vulnerable, un-unionised workers make gains at work in the informal economy.
The question is not confined to academic interest but is of some practical relevance to labour organisations, possibly to employers and certainly to informal workers themselves.
Method
Beyond the abstractions of labour supply facing greater demand, however, and beyond the impact of state interventions on raising the reservation floor for wages, there is no theory, even of an institutional kind, to guide the search for answers. We therefore examine these conventional approaches first; and then turn to summarise a scoping review of the Indian literature on the political economy, institutions and practices of informal labour gains.6
Macro-Level Explanations
(1) Demand for Labour: Where the non-farm economy has flourished (as in northern Tamil Nadu, Harriss-White and Janakarajan 2004) and/or sectors are booming (notably in construction throughout India, Prosperi, forthcoming) and/or demand for specific skills rises (e g, in the handloom silk industry in south India, Roman 2008), and where transport and communications infrastructure has reduced the transaction costs of work and widened local fields of labour supply through commuting (Carswell and De Neve 2013), real wage gains to labour have been recorded.
In the agricultural economy, higher agricultural product prices, when not matched by higher bio-chemo-mechanical input prices, have been found to enable higher agricultural wages to be conceded, irrespective of the effects of the Employment Guarantee Scheme and the real wage effects on net consumers (Rao 2011).
Where a new technology enhances net labour demand (as is said to have happened in the case of Bt cotton), other things being equal, agricultural wages have also been found to have risen (Subramanian and Qaim 2010).
But the literature on these gains is content to stay at the level of description; it does not account for the micro-political means whereby these real wage increases have been gained.
(2) The State and Supply: While the International Labour Organisation caught the world’s attention by developing the concept of “decent work” – involving rights to work, at work, to labour organisation (or dialogue) and to social security, far less attention has been paid to forms of political mobilisation which could actually secure decent work rights. In India in late 2005, a significant concession was secured through an employment guarantee that grants 100 days of work (in practice about half of that) to all self-selected work-seekers at levels of pay at or above the local minimum wage (Reddy and Upendranath 2009). If confined to the rural slack season this intervention has income smoothing effects. When clashing with peak agricultural demand, by being an alternative it has the potential to set a wage floor. There is a sharp and inconclusive debate over the varied local effects of the employment guarantee. At less than 1% GDP it can hardly drive national wage-rate gains. Gaiha (1997) records supportive effects on slack season agricultural wages. In three states of India studied by Reddy and Upendranath (2009) there was significant female participation in the National Rural Employment Guarantee Act (NREGA) work when due process was fair and minimum wages on the scheme exceeded agricultural wages (Reddy et al 2010). In rural Tamil Nadu, Heyer (2012) has observed employers’ willingness to follow the rises in NREGA rates under conditions when not matching NREGA pay affects the supply of labour.
The employment guarantee can be seen as a component of a slowly emerging and fragile welfare state. The public distribution system (PDS) is the oldest and central element of this bundle of policies – developing from 1965 and actually strengthening its performance in the current era – amid criticism and proposals for alternatives (Khere 2011). A national social assistance programme was put before Parliament in 1995 (Justino 2003). Social security bills for informal workers were placed in the Lok Sabha (Parliament) in 2008; a (much debated) food security bill in 2012 and there is expert as well as public mobilisation for wide reforms to health and education. Threatened by the policy turn towards cash transfers and vulnerable to the health of the budget, this skeletal welfare state aims to improve conditions outside work and compensate those incapable of working.
Its impact on wages and working conditions in the informal economy is thought to be traced indirectly – first through expanding the capacity of workers to withdraw from the most degrading and oppressive conditions of work to devote time to other aspects of domestic work, to themselves, childcare (Heyer 2011a and 2011b) or education (Prosperi forthcoming) and second through notable improvements in the respect paid to labour through the language and idioms of work.7 At the same time, in failing to address work conditions and focusing on welfare outside work, this suite of interventions does nothing if not legitimate informal labour. One hypothesis needing further exploration across the federation of Indian states is that the extent to which the state assumes the role of patron and develops a welfare state is related positively to gains in informal sector wages.8
These state welfare rights are being secured in a vulnerable and drawn-out process involving civil society movements and academic activism together with left party pressure whenever this is politically possible. They have not been secured directly by informal workers themselves. And both the political and the analytical framing of gains is confined to the wage level – no other aspect of work is well-addressed.
So the macro-level literature shows that the question of the tactics and institutions through which gains are secured is a general question that requires micro-level and detailed, context-rich research for its answers.
Micro-Level Explanations
Moving beyond descriptions of levels and trends, demand and supply, we first examine explanations involving action by employers before turning to employees.
Employers’ Trusteeship: CSR: Pressurised by campaigns on the part of consumers and civil society representatives, highly selective and limited improvements in labour standards have been imposed on informal producers by registered global companies under “CSR” (Ruthven 2008). Case studies documents elaborate evasive tactics as well as strategically selective success (Samy and Vijayabaskar 2006). In the case of IKEA for example, gains have been made in health and safety and in environmental standards. But the IKEA workforce’s own demands reflect different priorities (e g, lack of overtime pay and undercutting by contract labour) and these have not been addressed under CSR. Rights to organise have not been honoured, nor has social discrimination in the workplace been countered (Prosperi 2010; forthcoming).
Patronage and Paternalism: Increasingly daily wages are being replaced by piece rates and, though the practice is still not widespread, farmers’ own searches for labour are being outsourced to labour contractors. There is a growing literature on the hold of contractors over agricultural – especially migrant – labour (Breman et al 2009) but labour contractors are now spreading through the informal economy. In a case from the construction industry, Prosperi found contractors able to discriminate in wages between individual gang members, based on personal relations of loyalty, reliability and trust. With power to divide the workforce, they may concede gains to individuals at the expense of the collective. Some gang labour has been found to be seasonally bonded. Gangmasters may also organise housing, food, healthcare and communication for groups of migrant labour, though this is certainly not a common occurrence (Harriss-White 2010; Picherit 2009). The extent to which they mediate claims with employers on behalf of labour awaits a dedicated study of contractors.
The body of evidence about employers’ actions invokes cause and effect, mostly by inference. Gains to labour are not conceived as a micro-political struggle.
Employees’ Assets and the Role of Self-Employment: In a closely observed case study of women’s work in rural Andhra Pradesh, Garikipati shows that the ownership of assets relates to stronger bargaining power. She argues that this results from self-employment being an alternative to wage work. Indeed experts on labour often see self-employment as “good quality work” (Sundaram 2007) since the distribution of earnings from self-employment has a higher and longer right-handed tail than that from wage work and since autonomy is found to be a valued attribute of work (Ruthven 2008; Chandrasekhar and Ghosh 2007). The “shift to self-employment” is conceived as a gain in work quality rather than as a form of production or trade generating an opportunity to accumulate.
In fact, while it is true that self-employment is now the commonest form of work in India accounting for 53% of the workforce,9 much evidence shows it to be propelled by the compulsions of poverty rather than entrepreneurial prospects for accumulation. Self-employment may be understood as self-exploitation, or undertaken part-time or in slack seasonal employment troughs. Or it is the preserve of women returned to homeworking after a period (1999-2005 judging by the labour statistics) spent in wage work as a result of agricultural distress (Corbridge, Harriss and Jeffrey, forthcoming).
It is a matter of some importance that self-employment is classified by labour economists and lawyers alike as “disguised wage labour” because with no consensus on its terminology, self-employment/petty production/own account enterprise/micro-enterprise cottage industry/the tiny sector, etc, is consensually interpreted as a positive shift in the terms, conditions and returns to labour.
In fact, there appears to be a continuum of forms of self-employment from hardly disguised wage work to complete autonomy. Its distinctiveness takes several forms: first, while labour is exploited on labour markets, self-employed workers can be exploited on (rental) markets for property, raw materials, money and finished products – they may shift the balance of power towards them in exchange relations on four markets (contracts may shift adversely too). Second, self-employed people can operate a distinctive logic of super-exploitation or super-efficiency in which production is maximised rather than (marginal) productivity (in which improvements would be indicated, perversely, by reductions in production). Third, exchange relations contrive to prevent accumulation and self-employment expands instead by multiplication; so the question whether an expansion in self-employment is an indication of social gains to labour or rather a signal of the power of relations preventing accumulation (or both) is an open one. Fourth, self-employed workers are disenfranchised in labour law when they cannot identify a single employer against whom to bring a grievance to court (the multiple exchange relations in which the self-employed are entangled making this impossible).
The possession of assets may make it possible to bargain higher wages, but the turn to self-employment is not a solid indicator of gains by labour.
Migration: Migrant labour appears to bring mixed effects on labour markets. On the one hand, an increase in the supply of (compliant) labour threatens employment opportunities as well as wages of workers in the destination sector and site – worse for women than for men and worse for older rather than younger workers. On the other hand migrant labour often manages to improve wages over and above rates in the origin (Picherit 2009; Pattenden 2012). The effects of migration on migrants themselves are far from homogeneous. They may involve bondage or they may include social liberation, especially for oppressed dalit labour (Rogaly and Coppard 2003). Migration is also structured through institutions of caste, gender, locality, kinship and friendship but the literature suggests that while these relationships are vital in recruitment per se, their effectiveness in bettering work conditions is not well researched or established. As with the case of individualised relations with contractors so here with entire groups of migrants, low wages may be accepted in the interest of stable work opportunities. There is little evidence of migrants themselves attempting to improve work conditions. One case of informal labour mobilisation observed by Prosperi (2010) was a frustrated reaction to extremely delayed and non-payment of wages.
Shifts in Sector/Location: Net of migration, other shifts may result in better working conditions. Moves from agriculture to the rural or local non-farm economy, and from rural to urban work have long been associated with increased earnings (Jayaraj 2004). So much so that the local urban non-farm economy may become a segmented redoubt – barring women and low caste aspirants (Haggblade et al 2010). Entry for them is a political struggle.
Long-Term Loyalty: Case material demonstrates that, despite contractual precariousness, wages may increase with the length of service with a given employer (Prosperi 2010, forthcoming; Harriss 1981; Harriss-White 1996). On the one hand this may be a customary norm; on the other it may reflect individual skill and experience. Gains are slow and individualised. Employers may also seek to bind long-term informal employees without written contracts who they desire to retain, using loans.
Deployment of Collective Identities: In village studies in Tamil Nadu (Ramachandran et al 2001) networks and social relations among agricultural labour based upon kinship, friendship and caste are described as being deployed to raise wages and improve conditions. Unorganised labour may also organise itself by village of origin and locality (where it can restrict entry, operate a closed shop, and negotiate periodically and in the collective interest against a set of employers).10 Research in Haryana demonstrates that collective identity may be as much a structure of control as it is one of enabling and empowerment (Rawal 2006). How localised the gains achieved by the mobilisation of social identities are – and whether they are made at the expense of other groups of workers – has not been established. The dynamics of such processes have mainly been researched in the context of migration.
Conclusions
While India’s informal economy provides evidence of ongoing vulnerability, there is recent evidence for real wage gains. Yet the question of the micro-political practices by means of which gains in wages and improvements in working conditions are achieved by un-unionised, unorganised labour in the informal economy is one that does not seem to have been researched explicitly. It is also a general question whose answers have to be sought at the micro-level.
The literature of case material does not appear to be abundant. Time series or historical evidence hardly exists and the trend of all-India real gains appears to be too recent for research cycles to have been completed. To date answers have to be found between the lines of research which has other objectives. Much of the existing evidence associates certain economic conditions with certain labour-market outcomes inferring cause and effect. Even literature rich in the details of working conditions (in agriculture in particular) ignores the question of the tactics used to struggle for wage gains or for changes in non-monetary gains, such as respect.
Surprisingly little is known substantively. Relations of clientelism or loyalty may bring gains to individuals. The existence of alternative work at higher rates (state-supplied/self-employment/different sectors/different locations) with the option of not working, or not working as many days may force employers to raise wages. They then start to worry about the timing of labour supply – they may try to treat labour better – “like a bride”11 – not merely offering higher wages but also better conditions. Not enough is known about how they resist or capitulate.
Labour may organise for objectives outside work – conditioning their life-world and their reproductive space – when mobilising to improve conditions at work is currently faced with insuperable obstacles. Collective identities may be deployed in the search for work but are rarely recorded as the basis for struggles for improved conditions. If non-market forms of exchange, co-ownership, solidarity institutions, cooperative and collective practices of labour protection play roles in the securing of gains to men and women workers, they are not yet identified and recorded.
For a wide constituency of public interests, and since there is no sign of anything other than further informalisation, systematic research is needed into the means whereby informal labour reduces its vulnerabilities and achieves improvements in its working conditions.
Notes
1 See Jan’s (2012) critique of Sanyal (2007).
2 The informal economy is termed unorganised in India but it would be incorrect to argue that it is either chaotic or disorganised – quite the opposite (Harriss-White 2003).
3 In the case of Dharavi slum in Mumbai, see Mukhija (2003).
4 According to the NCEUS (2008), they had increased from Rs 34 per day in 1993-94 to Rs 43 in 2004-05.
5 Nathan and Sarkar (2012). It has subsequently dipped to a seven-year low in 2012 (http://india.nydailynews.com/newsarticle/50215dbbc3d4ca5129000005/india-...).
6 See Prosperi (2010) and forthcoming for analyses in the construction industry, garments and textiles, food processing and agriculture.
7 Heyer (2012).
8 Harriss-White (2010) reviewed literature to argue the reverse however – that even in the informal economy, work status had a major impact on access to social security.
9 This is driven by the agricultural sector and varies greatly within the non-agricultural economy. See references in Harriss-White (2012).
10 For example, marketplace porters in the town of Arni, south India: source – author’s field interviews, 2012.
11 Judith Heyer, Personal Communication (2012).
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