In­for­mal jobs are the new norm, not the ex­cep­tion

We need to iden­tify strate­gies to or­gan­ise in­for­mal work­ers to in­crease their col­lec­tive rep­re­sen­ta­tive voice

Hindustan Times ST (Mumbai) - - COMMENT - RADHICKA KAPOOR

Over the last one year, the govern­ment has claimed that In­dia is fac­ing a jobs’ data cri­sis, not a jobs cri­sis. In the ab­sence of any of­fi­cially re­leased em­ploy­ment-un­em­ploy­ment sta­tis­tics since the Labour Bureau’s house­hold sur­vey of 2015-16, the lack of any re­cent data (bar­ring that of the Cen­tre for Mon­i­tor­ing In­dian Econ­omy, a pri­vate agency ) is cer­tainly a prob­lem. But the real is­sue, which has at­tracted rel­a­tively lit­tle at­ten­tion in the jobs de­bate, is that of the dom­i­nance of in­for­mal em­ploy­ment.

The Na­tional Sam­ple Sur­vey’s (NSS) last quin­quen­nial em­ploy­ment-un­em­ploy­ment sur­vey (2011-12) showed that 92% of In­dia’s work­force is in­for­mally em­ployed. More re­cently, the In­ter­na­tional Labour Or­ga­ni­za­tion (ILO) pro­vided com­pa­ra­ble es­ti­mates on the size of the in­for­mal econ­omy at the global and re­gional lev­els for the first time (Women and men in the in­for­mal econ­omy: A sta­tis­ti­cal pic­ture, 2018). The re­port found that 88.2% of em­ploy­ment in In­dia was in­for­mal, sig­nif­i­cantly higher than the global av­er­age of 60%. What is more, the preva­lence of in­for­mal em­ploy­ment in In­dia was com­pa­ra­ble to that of sub-sa­ha­ran Africa (89.2%). With lit­tle job se­cu­rity and lim­ited ac­cess to safety nets, most of the in­for­mally em­ployed re­main vul­ner­a­ble to health haz­ards, eco­nomic down­turns and nat­u­ral catas­tro­phes. It is no sur­prise that the ILO es­ti­mates that three out of four work­ers in In­dia will fall in the cat­e­gory of vul­ner­a­ble em­ploy­ment by 2019.

The ex­tent and im­por­tance of the tra­di­tional in­for­mal sec­tor has per­sisted in In­dia over the decades and it has not been ab­sorbed by the mod­ern sec­tor as ex­pected with ro­bust eco­nomic growth. Many at­tribute this to fac­tors such as In­dia’s labour reg­u­la­tory en­vi­ron­ment and trends in trade and tech­nol­ogy. How­ever, it needs to be noted that In­dia’s pat­tern of struc­tural trans­for­ma­tion where the GDP growth has been driven by sec­tors which are not em­ploy­ment in­ten­sive has gen­er­ated lim­ited pro­duc­tive for­mal job op­por­tu­ni­ties for the coun­try’s low skilled and un­skilled work­force. Con­se­quently, the poor, who do not have the lux­ury to re­main un­em­ployed in their wait for for­mal jobs, re­sort to in­for­mal em­ploy­ment.

What is more, many of the new jobs be­ing cre­ated in the plat­form econ­omy (such as Ola and Uber) are also non-stan­dard in na­ture. In other words, they are out­side the am­bit of laws and reg­u­la­tions cov­er­ing min­i­mum wages and other ben­e­fits. While for some, these in­for­mal work ar­range­ments may be a mat­ter of choice and a way of sup­ple­ment­ing their in­come, for most oth­ers they are as­so­ci­ated with job in­se­cu­rity, earn­ings volatil­ity and re­flect pre­car­i­ous work as they can no longer rely on an em­ployer to pay their pen­sion or cover their health­care. Thus, as old forms of in­for­mal em­ploy­ment per­sist, new forms are also emerg­ing. We need to con­front the re­al­ity that the in­for­mal econ­omy is in­creas­ingly the norm, not the ex­cep­tion. In­for­mal work­ers are not the mar­ginal or tem­po­rary en­ti­ties de­picted in early de­vel­op­ment the­o­ries. There is no deny­ing the im­por­tance of cre­at­ing an en­abling en­vi­ron­ment for pro­duc­tive en­ter­prises to gen­er­ate more for­mal jobs. It is another mat­ter that this can­not be achieved by man­dat­ing a 10% quota in govern­ment jobs for eco­nom­i­cally weaker sec­tions, when the pool of govern­ment jobs is shrink­ing. But, the real pol­icy chal­lenge lies in how we can im­prove the qual­ity of in­for­mal work and re­duce the de­cent work deficit in the in­for­mal sec­tor.

In ad­di­tion to pro­vid­ing so­cial se­cu­rity ben­e­fits, there is a need to re­think how so­cial pro­tec­tion sys­tems and labour mar­ket in­sti­tu­tions need to adapt to a chang­ing world where tra­di­tional em­ployer-em­ployee re­la­tion­ships are likely to erode. We need to iden­tify strate­gies to or­gan­ise in­for­mal work­ers to in­crease their col­lec­tive rep­re­sen­ta­tive voice and en­sure that their fun­da­men­tal rights at work are not vi­o­lated. The lack of data can­not any longer be cited as an ex­cuse to deny the enor­mity of these chal­lenges.

Radhicka Kapoor is a fel­low at ICRIER, and has worked with the Plan­ning Com­mis­sion and In­ter­na­tional Labour Or­ga­ni­za­tion The views ex­pressed are per­sonal

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