Collecting thoughts and colouring them with ink may not be treated as labour and so I wonder if I can rightfully celebrate May Day! That brings me to an interesting question about the place the unemployed have in India's proletarian parties.
The immediate provocation for this is the sustained opposition of the Left parties and the trade unions to labour reforms in this country. It is not very difficult to comprehend the position of the trade unions: Self-interest necessitates defending their existing rights and benefits. So it makes perfect sense for them to fight to keep wages higher than what they should be, even if it means that the demand for labour remains lower than what it should be. As long as they remain employed, the effect of high cost of labour on the overall industrial employment and the nature of production do not matter to them. Rational behaviour? You bet!
The Left parties cannot oppose the Trade unions. It is a problem, part of a historic image trap. Organised workers are the most visible component of the working class and historically, Left movements have identified with their cause. But where does that leave the Left parties vis-a-vis the unemployed, the underemployed and the employees of the unorganised sectors?
Contrary to the expectations of basic economic logic, Indian industrialisation has been predominantly capital-intensive, even as the country has remained as an obvious case of a capital scarce, labour abundant economy. A couple of distortions explain this. One is the presence of the so-called 'depreciation allowance' on tax, which allows companies to write off amounts against capital depreciation, promoting an obvious bias in favour of capital over labour. What a brilliant state policy for an over-populated country, right?
What is, but of much more consequence is the inflexibility in the labour market and the presence of laws obviously biased against the employers. Once the real cost of employing labour is artificially high, it should hardly be surprising that industrialists prefer capital-intensive techniques of production, even in a labour abundant country like ours. So the liberalised private sector now grows at exciting rates, but without any reforms in the labour market, there is hardly any growth in employment in the manufacturing sector. Well, the critics of economic reforms talk about jobless growth, but what they would not want to admit is the fact that it is due to less reforms and not more!
In a country, where nearly 9 out of 10 workers in the manufacturing sector are in the unorganised sector, where a good number of agricultural workers are underemployed, and where unemployment levels are high even by developing country standards, should a small percentage of unionised workers hold back employment growth? Should the better off among the working class be allowed to protect their interests by effectively blocking the entry of others?
Labour reforms would reduce the cost of employing labour and would thus result in an increased demand for labour. Any benefit this process accrues to the industries would again translate into more jobs. In a country, where the average level of education is nothing worth writing home about, service sector jobs can provide employment only to a small, often English educated, minority. So there is no way one can truly undermine the importance of employment generation in the manufacturing sector. This, but, demands the immediate removal of anti-employer biases from labour laws. In the long-run interests of the working class movement, in the interests of the 'reserve army of the unemployed', would the Left parties oblige? Let this May Day mark a new beginning for the poor and the unemployed of this country.
The immediate provocation for this is the sustained opposition of the Left parties and the trade unions to labour reforms in this country. It is not very difficult to comprehend the position of the trade unions: Self-interest necessitates defending their existing rights and benefits. So it makes perfect sense for them to fight to keep wages higher than what they should be, even if it means that the demand for labour remains lower than what it should be. As long as they remain employed, the effect of high cost of labour on the overall industrial employment and the nature of production do not matter to them. Rational behaviour? You bet!
The Left parties cannot oppose the Trade unions. It is a problem, part of a historic image trap. Organised workers are the most visible component of the working class and historically, Left movements have identified with their cause. But where does that leave the Left parties vis-a-vis the unemployed, the underemployed and the employees of the unorganised sectors?
Contrary to the expectations of basic economic logic, Indian industrialisation has been predominantly capital-intensive, even as the country has remained as an obvious case of a capital scarce, labour abundant economy. A couple of distortions explain this. One is the presence of the so-called 'depreciation allowance' on tax, which allows companies to write off amounts against capital depreciation, promoting an obvious bias in favour of capital over labour. What a brilliant state policy for an over-populated country, right?
What is, but of much more consequence is the inflexibility in the labour market and the presence of laws obviously biased against the employers. Once the real cost of employing labour is artificially high, it should hardly be surprising that industrialists prefer capital-intensive techniques of production, even in a labour abundant country like ours. So the liberalised private sector now grows at exciting rates, but without any reforms in the labour market, there is hardly any growth in employment in the manufacturing sector. Well, the critics of economic reforms talk about jobless growth, but what they would not want to admit is the fact that it is due to less reforms and not more!
In a country, where nearly 9 out of 10 workers in the manufacturing sector are in the unorganised sector, where a good number of agricultural workers are underemployed, and where unemployment levels are high even by developing country standards, should a small percentage of unionised workers hold back employment growth? Should the better off among the working class be allowed to protect their interests by effectively blocking the entry of others?
Labour reforms would reduce the cost of employing labour and would thus result in an increased demand for labour. Any benefit this process accrues to the industries would again translate into more jobs. In a country, where the average level of education is nothing worth writing home about, service sector jobs can provide employment only to a small, often English educated, minority. So there is no way one can truly undermine the importance of employment generation in the manufacturing sector. This, but, demands the immediate removal of anti-employer biases from labour laws. In the long-run interests of the working class movement, in the interests of the 'reserve army of the unemployed', would the Left parties oblige? Let this May Day mark a new beginning for the poor and the unemployed of this country.
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