Female workers and challenge of ‘precarious work’

Women play a critical role in the Sri Lankan economy and are the backbone of several economically important sectors for the country – tea, garments, and migrant workers.

Roughly a third of those employed in the country are females. But, there are indications that this number is changing. From 2002 to 2010 the female labour force grew at almost twice the rate of the male labour force and the female share of the labour force increased. This is encouraging, given currently that only about a third of working age females are participating in the labour market compared to more than two thirds of working age males. Furthermore, a smaller proportion of females are working in the informal sector (57.1%) compared to males (65.4%). Part of the greater share of females in the formal sector is explained by new employment opportunities opened mainly for young women in the exportoriented labour-intensive light manufacturing sector, and trade and tourism-oriented services sectors since liberalization. Does that mean that more and better employment opportunities are available for females in Sri Lanka?

Many Sri Lankan female workers, who are largely in the light manufacturing and the services sectors, are in ‘precarious work’

Economic liberalization and female workers

The nature and structure of employment in Sri Lanka changed drastically since the introduction of the far reaching economic liberalization programme in 1977 and paved the way for the country to join the global production chains. Since the opening of the first Free Trade Zone (FTZ) in the country in 1978, many FTZS have opened across the country, with the objectives of attracting foreign direct invest- ments, expand exports, earn foreign exchange and generate employment. Various incentives, in terms of tax concessions and other infrastructure facilities, are given to investors to encourage them to set up in these zones. Although in some countries part of the incentives offered include more liberal labour laws, this is not the case in Sri Lanka. However, despite firms having to abide by the same labour laws, some studies find that the enforcement of labour laws is weak within the FTZS. The industrial activities in the zones are mostly characterized by light manufacturing industries such as garment factories and other light manufacturing products. Systematic information on these workers is not available from official government sources. In 2007, roughly 114,000 workers were estimated to work in the FTZ, including 75,000 females and 39,000 males.

Another sector that benefited from the liberalization of the economy in 1977 was the hotel and hospitality sector. Despite being severely affected by security concerns relating to the secessionist conflict in the country, the hotel sector has remained important. According to the Labour Force Survey, 145,795 workers were working in the hotels and restaurants sector in the country in 2010. Many of the workers in the sector are temporary seasonal workers who do not benefit from social protection. It is also a sector with the longest working hours in Sri Lanka. More than 65% of workers in the hotels and restaurants sector work for more than 50 hours a week. Anecdotal evidence suggests that more than half the workers in some hotels are variable workers who are hired for a short period.

Challenge of ‘precarious work’

To be competitive in the global market, firms in the modern economy have to continuously improve productivity and decrease costs. Faced with increased competition, employers are looking to improve flexibility with regards to resizing workforces and lowering fixed costs, thereby better adjusting to the changing demand patterns in the global market. Some measures adopted by enterprises include reducing the permanent workforce and offering more contractual and temporary working arrangements, making employment more unstable and uncertain to workers. Along with this, there was greater demand on the workers to meet targets and sustain quality, creating a more intense working environment and raising issues concerning the health and safety of workers.

Together, these developments have made new employment opportunities more uncertain, unstable and insecure. Such work arrangements are referred to as ‘precarious work’ in the literature. Work is precarious as workers are not given long-term employment contracts. Work is either temporary or on contractual basis. Such work arrangements are beneficial to the employer; as such workers are easier to terminate during economic downturns. These workers also cost less, as short term employees are not eligible to receive some social protection benefits such as gratuity. As employment contracts are continuously renewed, workers do not benefit from experience related salary increases. Work is precarious not only due to the nature of the contractual arrangement between the worker and the employer, but also because of the nature of work.

Light manufacturing (e.g., garments) and service sector workers (e.g., tourism) work under intense pressure, where they are expected to carry out routine tasks to produce a target number of goods that are of good quality. During times of high demand these production targets can be quite challenging, and workers are compelled to work long hours to meet production goals. Such intense pressure and long working hours can be detrimental to workers’ health. This can especially be of concern to precarious workers whose employment contracts may not be renewed due to ill health.

Overall, the share of female workers in the formal sector is higher than the share of male workers. Work in the formal sector is considered more desirable, naturally, as workers receive better social protection and better conditions of work. But, available evidence suggests that although a greater share of female workers are in the formal sector, their employment conditions may be as unstable, uncertain and insecure as those of workers in the informal sector. Many Sri Lankan female workers, who are largely in the light manufacturing and the services sectors, are in ‘precarious work’. While recognizing the contribution of female workers to the Sri Lankan economy, it’s time to recognize and address these emerging challenges faced by them.

(Nisha Arunatilake is a Research Fellow and Head of Labour, Employment and Human Resources Development research at the IPS. The op-ed originally appeared in Talking Economics)