Informal workers & the economy.

AuthorJhabvala, Renana
PositionBy Invitation

Although informal workers were always a majority in India, they were only 'discovered' with the advent of liberalization. Their vulnerabilities and insecurities need to be addressed through social security policies which recognize their specific needs and through laws which are not confined to labor, but include commercial law as well as regulations which cover specific sectors of the economy. However, organizing and advocacy of the informal workers cannot be confined to specific needs but must be a movement towards a better society and a fairer economy.

Discovering the Informal Economy

The informal economy has always existed in India, but it was seen neither as an important part of the economy, nor as a theoretical category that needed to be developed and explored. Although, the term "informal sector" was adopted internationally by the ILO in the mid-1970s, it retreated to the margins of both research and policies, until only a little over a decade ago. In 2002, the International Labor Conference finally debated a recommendation, which coined the term "informal economy", and recognized both self employed and wage workers to be part of this economy. It also recognized the unprotected and insecure nature of work in this economy and committed the ILO to working towards social security and various forms of protection of these workers.

In India, the term "unorganized" rather than "informal" has been used when referring to these unprotected workers. This has caused considerable confusion as "unorganized" implies a lack of organization, and many commentators have in fact used it this way. The same term "unorganized" has also been used by the Central Statistical Organization to describe enterprises rather than workers, and it defines unorganized enterprises as those employing 10 or more workers with power, and 20 or more if there was no power being used (NCEUS, 2007:2). However, a lot of this confusion was cleared up by the seminal work of the National Commission on Enterprises in the Unorganized Sector, when it clearly conflated the terms "informal" and "unorganized" and defined both terms to mean those workers in unorganized enterprises, including the self employed, and those in the organized formal sector without any employment or social security benefits (NCEUS, 2007:2).

It has been a long journey for these workers from the margins towards the centre, which has happened not because of any changes in the conditions of the workers and but far more due to the changes in perception that have come about with the historical shifts due to globalization.

The attitudes which marginalized the informal workers reflected a larger perspective, which defined a worker as one who conformed to the image of the 'laboring or industrial man'. This was a full time, generally male worker, with one skill and one occupation, working for a well defined employer in a factory or office, a workplace under the control of the employer. This worker, or employee, sold his labor to the employer and received a wage or salary in return. It was the security of this 'industrial worker' around which the systems of security or social protection were based. Although, it was recognized that most workers in India did not fit this model, the general wisdom was that as the Indian economy grew and in dustrialized, the informal economy would gradually shrink and most workers would conform to the industrial prototype.

But in the eighties and nineties there were rapid changes taking place internationally with the ascendancy of the forces of globalization and trade liberalization. The macro-economic changes in industrialized countries were supported by the rise of neo-liberalism which shifted the emphasis from security to growth. Regulations which promoted security were seen as inimical to economic growth, and 'deregulation' was to be promoted in order to facilitate the working of the market. According to the Chicago School of law and economics, statutory or institutional regulations can be justified only if they promote, or do not impede growth. If they do not do that, they are impediments to efficiency, and therefore, because efficiency and growth are equated with improvements in social welfare, most regulations are suspect. This perspective was to become pervasively influential (Standing, 2002:75).

In India, this school of thought gradually began to gain ascendancy in the mid to late eighties, and became the dominant school of thought with the debt crisis in 1991. The main target of this new school of thought was the public sector undertakings, the visible face of the socialist economy. In addition, there were persistent demands for the 'deregulation' of markets, which included delicensing of industry, lowering import and excise taxes and removal of reservations and quotas for categories such as small scale industries. The popular image of the 'Li cense-Permit Raj' caught the imagination not only of the industrialists, but of middle classes as well as the poor, all of whom continually suffered under the highhanded treatment and corruption of the entrenched bureaucracy.

The statutory regulatory system for labor too came under attack with demands for 'exit' policy to increase the 'flexibility' of firms and allow them to compete internationally. More and more came to be written about the privileged position of formal sector labor. The focus began to shift towards workers who were not part of the formal sector.

Agency & Organizing

Self Employed Women's Association (SEWA), was perhaps the first trade union to consciously begin to organize workers in the informal economy. Initially, in the early seventies, SEWA found a great deal of resistance even to the idea of organizing women in this sector. Most people believed that to qualify as a worker a person had to be an employee, the problem being compounded by the belief that women were not workers but only wives and mothers. The initial resistance to SEWA came from the Labor Commissioner who refused to register SEWA as a trade union. Firstly, he said, these workers had no definite employer, so they did not fit the traditional definition of a worker. Who would they bar gain with? Secondly, these workers had no fixed occupation. They went from one kind of work to another; they did a number of different types of work together. A proper worker had only one permanent occupation, and Trade Unions were formed by occupation. And finally, these workers often had no fixed place of work, such as a factory, so how would it be possible to organize them. Interestingly, the Trade Union Act does not in fact specify all these conditions, but the officials had a certain type of worker in mind and the women we brought to them did not fit into their idea of a worker.

In fact, women did not fit into anyone's idea of a worker. In India there is a very large category of home -based workers making a variety of goods in their own homes either for direct sale or for a contractor or employer. When we first started organizing the women garment stitchers we were told by the employers that these women were not workers but just housewives who were stitching in their 'leisure time'; whereas we found that they were working anywhere between eight to ten hours a day. We were also told by the labor commissioner's office that since there was no direct employer-employee relationship between the employer and the women, they were not covered by any labor laws, although we found that there was a complete control of production by the employers. Even the husbands of the workers said 'my wife does not work' but only does this as a 'hobby'. Statistical agencies too ignored these women and their work did not appear in population censuses.

These attitudes towards women informal workers reflected the general thinking. Within the prototype of the "industrial" or "laboring" man, is subsumed the housewife woman. The industrial man through his earnings supports a family, and the woman's role is nurturing the...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT