Informal work.

AuthorDesai, Meghnad
PositionBy Invitation

Formal Labor Markets

For much of history, work was informal, casual and precarious. But it was seldom regular or bound by the clock. It was often seasonal. People worked for themselves as peasants or for landlords as serfs or slaves. Apprentices signed up with Masters and became like family members. Shop keepers employed their family members or poorer relations on an informal basis.

With the advent of the Industrial Revolution, work became more regular, dictated by the needs of the machines, and the importance of getting things out on time. There were shifts of work and the issue of the length of the working day (to which Karl Marx devoted a large chapter in Capital Volume 1) became an arena of struggle. As things advanced, there was a greater protection for workers in enterprises about their hours of work, their health, and their wage rates. Trade Unions entered the foray to secure better rights and got legislation passed to enshrine the rights of factory workers in law. Developed countries ended up with formal labor markets and workers' rights defined at the place of work. The insecurity of periodic unemployment still remained but even so when employed in an enterprise, workers had rights.

Much of the rest of the world has carried on with a tiny sliver of the economy organized along formal lines with factories and labor legislation guaranteeing workers' rights. These, largely urban, workers employed in the larger enterprises have secured rights, similar to those in the developed country in theory, if not in practice. In India, after independence, there was great effort to secure the workers in the formal sector as many rights as their fellow workers in the metropolitan economies enjoyed.

Yet the bulk of labor force worked in the informal sector. In India, the developed formal sector remains an island of under 10 percent surrounded by the swamp of informal workers. Informal work is the norm; formal work the exception. Yet little effort has been made to extend even a modicum of rights to those working in the informal sector

Formal Sector Casualization

As many articles in this Special Issue point out, the situation of informal workers remains precarious. The rigid boundaries defining what is a formal sector enterprise not only leave many outside but even in the formal sector casualization is rampant since the costs of employing workers on a regular basis in a formal sector are higher than having contract labor. [The recent troubles at the...

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