Labour

Is 'Right to Work' More Important Than 'Minimum Income Guarantee'?

Various remedies are being suggested to tackle the growing rate of unemployment, but are they in tandem with the needs of the workers?

Two issues were concealed under the din of elections. The first is the depth of the agrarian crisis with rising costs, falling prices and diminishing livelihoods. The second is the declining rate of employment in urban India, even within the informal sector, and the tumult among the youth who have no future.

While most electioneering superficially touched upon the two problems and their remedies, the attention paid to both by academics and the media exhibits a social pressure.

The purpose of this essay is to examine if this attention is in accord with the needs of the workers, as expressed in documents and charters issued on their behalf, on the issue of urban unemployment.

One of the pivots around which this examination will take place is the proposal to have an Urban Employment Guarantee Programme. The other is the suggestion to implement a Minimum Income Guarantee.

The lead in the first has been taken by scholars from Azim Premji University (APU), who have recently published their report on ‘Strengthening Towns through Sustainable Employment: A Job Guarantee Programme for Urban India’ (JGPUI).

The second featured in the manifesto of the Indian National Congress (INC), as the Nyuntam Aay Yojana (NYAY) that promised to transfer Rs 6,000 per month directly into the bank accounts of around five crore households constituting the bottom 20% of the population.

Set against these two was a Workers Charter for the 17th Lok Sabha election, mapped out by the New Trade Union Initiative (NTUI), and the Right to Work Bill (R2WB) prepared by the Sajha Manch. The former is a national federation of several independent trade unions formed in 2001 to give space for the co-existence of multiple progressive political tendencies. The latter is a platform of small informal labour organisations in Delhi who came together in 1998 for mutual support.

Job guarantee programme vs NTUI

Let us begin by examining the JGPUI. The APU scholars have studied the national Swarna Jayanti Shahari Rozgar Yojana (1997), National Rural Employment Guarantee Act (2005), National Urban Livelihoods Mission (2013), the Ayyankali Urban Employment Guarantee Scheme of Kerala (2010) and the Yuva Swabhiman Yojana of Madhya Pradesh (2019) to prepare their recommendations. Their first provision is for 100 days of guaranteed work at Rs 500 a day (based on the existing daily wage across all urban occupations in 2018).

NTUI, on the other hand, demands that all contract workers with more than 240 days of employment under a single principal employer should be confirmed as permanent workers and paid a national floor level minimum wage to be recommended by a Wage Commission, pegged to GDP growth and average productivity increase, at not less than Rs 23,000 per month – or a minimum of Rs 880 a day.

There is a difference in perspective here. From the academic’s point of view, the average urban worker is unemployed for 100 days a year and, therefore, needs that many days of extra work at an existential survival wage – based on the minimum required to keep a worker alive. NTUI’s trade unions, on the other hand, wish to protect their workers even when they are employed for 240 days on contract, and to extend that protection to the full year at a living wage, as agreed to at the 15th Indian Labour Conference – based on the minimum food, housing, clothing and other social needs of a worker’s family of four.

Also read: Recognising the Challenge of Income Inequality in India

The work of the Sajha Manch reflects a third perspective that emerges from 17 studies conducted by the organisation in six resettlement colonies, with a total of over 3,000 respondents. These showed that 20.5% had permanent jobs, 34.6% were on contract, 24.8% were self-employed, the remaining 20.1% depended on odd jobs or were unemployed.

Hence, all these segments represented a broader class at work, and through public meetings and workshops, the Manch adopted the common criteria of 300 days of work at a living wage for all segments, to be negotiated annually at a tripartite Labour Conference. With the help of some lawyers, they then framed a Right to Work Bill (R2WB) around these criteria.

How will the work be generated?

The second question that follows is: how is the work going to be generated? Here too there is a difference in perspective. For its 100 days, JGPUI provides for a variety of works: including all public works, all public welfare services, protection of the urban commons, data gathering and paid apprenticeships for 150 days in all the above. NTUI is silent on how to create more work, although it does demand a National Urban Employment Guarantee Act along with a wage subsidy to micro and small enterprises.

R2WB lists several ways of generating work: labour-intensive public works with a material to wage ratio of 40:60, a cap on the capital investment per work opportunity created in all public and private projects, lifting the 1990s ban on recruitment in all public departments and placing restrictions on contracting out and privatising work which affects the availability of work.

In addition, it legislates for the entire class of workers by providing legal space, resources and licenses for, and removing restrictions on, productive work, legal identity for the working person, appropriate credit on easy terms, setting up training centres for new and innovative skills and assistance centres for occupational health and safety.

Who can get work?

The third question: who can get work? JGPUI proposes that one adult member from every household in the town would be eligible. But there would be two categories: one with education up to Class XII and having informal skills, eligible for all types of public works; another with a formal diploma or degree, who can apply for apprenticeships in administrative tasks.

NTUI retains its focus on contract labour, but tries to overcome a division among workers by stipulating a wage parity ratio not exceeding 1:24. R2WB adopts a demand-driven approach by declaring that work has to be provided to all persons, working or willing to work, and who have registered in Labour Exchanges for this purpose.

Payment: under JGPUI, workers are to be paid as per a job card that records the name, address, qualification and skills – and becomes the basis for getting jobs, as well as for updating when work is provided. A job card holder not provided with work would have to be paid an unemployment allowance.

NTUI demands an employment guarantee Act without any details. Thus, it may believe that unions cannot design the law. R2WB, on the other hand, brings law-making into the hands of the worker by specifying that every person registering at the Labour Exchange would have to be issued an identity card by the Exchange. The identity card would function in the same manner as the JGPUI job card to record all work done and income earned.

The state government has to provide work to every applicant, failing which she/he shall be entitled to unemployment assistance not less than three-fourths of the living wage. If the work does not enable the worker to earn a living wage, even then the state has to pay the balance wage.

Who administers the programme?

In JGPUI, the urban local body (ULB) is designated as the authority responsible for administering the programme. It will identify projects, prepare annual work plans and implement the programme while involving the ward committees and ward sabhas and with the help of dedicated and trained professionals.

Apart from the mention of an Act, the NTUI depends on an expert committee to set the methodology for determining minimum wage, an advisory board to revise minimum wages and minimum wage boards to implement wage payment.

But R2WB entrusts the preparation of the overall work plan to the state government, based on a survey of applicants at the Labour Exchanges set up in every ward by the Labour Department. The task of the ULBs or nagar panchayats is to finalise the projects at the local level and to supervise and monitor their implementation. Where the urban population is large, this task is allotted to the ward sabha or mohalla sabha. The labour officer in the Labour Exchange is held responsible for disbursing the unemployment or under-employment assistance.

Accountability

On the issue of transparency and accountability, JGPUI lays emphasis on proactive disclosure along with periodic social audits and public hearings through an independent social audit unit, with ward officers and trained social auditors, set up by the state government. It also stipulates that the grievances are addressed through grievance redressal councils and grievance redress officers at the levels of government and ULB.

Also read: ‘Minimum Income’ in India Must Come Through Jobs, Public Services and Pensions

NTUI feels the right to inspect and prosecute cases of minimum wage violation should be decentralised to registered trade unions. R2WB insists that the grievance redressal function should be vested in elected Worker Monitoring Committees at the Labour Exchange level. These committees are to also maintain oversight over all payments of wages and allowances, as well as address complaints concerning the implementation of a scheme or project.

Budget

Finally, with respect to budget provisions, we can again see divergences in approach. JGPUI estimates a cost of Rs 2.8 lakh crores on 5.9 crore potential workers in towns with less than ten lakh population. This amounts to about 1.7% of GDP. NTUI makes no budgetary claims. R2WB postulates that a national level, and in several states, Right to Work Fund(s) have to be established through appropriation by the respective legislatures.

In addition, these funds have first claim on penalties imposed on contractors, companies, corporations and government establishments for retrenchments and casualisation of work, on levies applied to discourage products or processes which contribute to global warming, higher taxes on higher consuming classes and the social and environmental costs imposed on high energy and material consuming development projects.

Now, we come to the NYAY scheme, which the INC promised to implement if voted to power. We now know that the party isn’t going to be in power – but the scheme is still worth analysing. Several academics have commented at length on it. It will suffice here to mention three that are fairly representative of the divergences among them.

Andy Mukherjee cites studies to show that between 1981 and 1991, when there were high barriers to foreign trade and investment, 32% of the economy’s value added went to labour as compensation, creditors claimed 27% as interest, and less than 21% accrued to shareholders as profit.

But after 1991, when import duties and license restrictions were relaxed, it became three to four times more expensive to hire workers relative to capital goods and, between 2001 and 2013, labour’s share of India’s value-added dropped to 23%, lenders’ take fell to 12%, but profit’s share zoomed to almost 50%. So liberalisation has produced a billion-plus working population that is pauperised. Politicians are now being forced to compensate them and the basic income guarantee is a type of compensation.

Jayati Ghosh finds the scheme to be “laudable in intent”, but “completely unworkable” in its present form. For her the fiscal cost is not high. It is the workability of the scheme that concerns her, as well as “the possibility of other and better ways of using fiscal resources”.

The first problem is how to identify the eligible, since it is hard to measure incomes. The second problem is how to deliver cash incomes to the identified poor. Hence, Ghosh suggests a strategy of providing universal employment guarantee, universal basic services and universal pensions. All this would create significant multiplier effects. The total cost would be only about three times the proposed income guarantee scheme for the poorest.

Sudipto Mundle agrees that it would be difficult to identify, and deliver cash incomes to the eligible. But he argues that if the following are excluded – all men; all women who are income taxpayers or from a household that already has a beneficiary; all persons with cement-brick homes, power connections, telephone connections, and so on; while the following are included – male recipients of old age or disability allowances; and males heading households with no women: then the scheme has merit.

He estimates a cost of about 3.3% of gross domestic product (GDP) – or around 2.5% of GDP by 2023. Merit subsidies, withdrawn subsidies and tax exemptions and concessions, together offer fiscal space of over 10% of GDP to finance Mundle’s modified scheme.

NTUI has not expressed an opinion so far on the NYAY scheme. So if we take the Congress party as the voice of the trade unions associated with the Indian National Trade Union Congress; then it would seem that there is significant union support, as long as the Congress does not cut down on other welfare measures.

For the Sajha Manch, the discussion on urban employment began when work declined with the closure of “non-conforming” industries in Delhi in 1999 and the sealing of “unauthorised” commercial units in 2005. Both were part of the general anti-poor bias of the executive and judiciary, trying to regulate or abolish street vendors, cycle rickshaws, manual labour and self-employment.

The constituents of the Manch thus argued for the need to establish a “Right to Work” rather than an employment guarantee scheme: a demand that negates a minimum income guarantee scheme that has no work.

The right of sympathetic academics and unions to advance the rights of workers cannot be denied. At the same time, workers have a right to think over and promote their own cause. If the two are not working in tandem then we may well have class at work in defining perspectives of work itself.

Dunu Roy is Senior Fellow at the Centre for Public Affairs and Critical Theory, Shiv Nadar University.