Economy

COVID-19 lockdown: Isn’t it time for the State to do business again?

The government has to step away from its role of a regulator succumbing to the pressure of businesses; it must recognise its power as procurer / consumer and investor.

 
By Pradeep Narayanan, Aqsa Agha
Last Updated: Tuesday 19 May 2020
Isn’t it time for the State to do business again after the novel coronavirus lockdown. Illustration: Ritika Bohra

More than 170 years ago, Karl Marx had said: “When society is in a state of decline, the worker suffers most severely”. The worker has a dual burden to bear by virtue of his role as a worker and also as a member of the society that is suffering.

“The political economy does not consider him (worker) when he is not working as a human being, but leaves such consideration to criminal law, to doctors, to religion, to the statistical tables, to politics and to the poor-house overseer,” he said.

Today the imagery of the ‘migrant worker’ — when not working, being beaten up by the police or made to walk thousands of miles, reduced to some statistic by the government — resonates with what Marx said. 

Today the only concern that privileged society has for migrant workers is to look at them as workers who need to be back into the workplace so that the business could go on! The worry is how to reduce the cost of contracting the worker back into the workplace.

The focus is not on how to improve terms of employment to incentivise workers to return on their own. Making production more responsible is the least of their concerns. And with labour laws being diluted through ordinances, the workspace will surely be worse off.

A novel coronavirus disease (COVID-19) assessment and relief team formed by non-profit Praxis and Partners in Change was in conversation with 316 workers from Bihar, Delhi, Madhya Pradesh, Maharashtra, Tamil Nadu, Uttar Pradesh and West Bengal between March 28 and May 5, 2020.

None earn more than Rs 15,000 per month — be they salaried workers or casual, across the garment, construction, agriculture and entertainment sectors. Most are from marginalised communities of dalit, tribal and nomadic and denotified tribes. Many are migrants.

The conversations were over the phone, at irregular intervals. But an analysis gives a pattern of how the workers have been coping:

Of the 316, 67 are salaried, factory workers with contracts. Only 14 received an honorarium for the lockdown week in March (the lockdown began March 24, 2020), which was measly. None received any wage for April.

The uncertainty about wages and job insecurity has led to increasing fear among workers about their family’s future. “We had a job until 23 March 2020. The mill has announced a holiday due to coronavirus. It did not give us any information regarding salaries,” said Sudha, a worker from the packaging department of a garment factory.

Of the 67, only five have accounts with the Employees’ Provident Fund Organisation. They were aware of salary deductions but did not how to access the fund. Many did not have such accounts and won’t be able to benefit from announcements made by the Union government.

“We are without work and any income. It is difficult to meet essential needs,” said Mariyappan, who  worked at the ironing department of a unit in Tirupur.

Among the 316 workers, 158 were daily wage casual labourers and 80 were migrant casual labourers. None of them received any wage from March 24, 2020. Of them, 32 tried to access work in April, but did not get any. None of them have access to social security. They have been asked to fend for themselves. 

In the absence of any income, 145 workers were forced to borrow money within the first month of the lockdown. The main reasons: for food and ration; healthcare and essentials for infants.

The main sources were friends and relatives followed by moneylenders, contractors and pawnbrokers. This trend, over time, will lead to increased indebtedness among workers and push them into situations of exploitation, further increasing their vulnerability.

As citizens, these workers should have access to the public distribution system (PDS). Of 316 families, 84 had at least one day during the lockdown when they survived on just two meals; 73 were such that they survived a day on only one meal.

Only 60 families had three meals a day. But they were running out of savings and had said it would be difficult for them if the lockdown continued beyond the first week of May. The one or two meals would also often comprise only rice. So, from the lens of adequate nutrition, almost all workers and their families face food scarcity. 

Only 171 families had ration cards, and were able to get PDS. Of them, 36 could access additional ration made available in mid-April. In Tamil Nadu, ration card holders could also get access an additional Rs 1,000 government support.

Not surprising, most without ration cards were from Dalit, nomadic and denotified (DNT) communities; almost all daily casual labourers. So, individuals from socially and economically marginalised communities bear the burden, not only as citizens but now also as workers. 

What has been the government’s response?

The Prime Minister appealed to corporates to continue paying salaries to workers during the lockdown. Appeals by the PM, with no clear directives or enforcement mechanisms, lead to no action.

This is reflected in what a supervisor said: “Only the general manager and above have got their salaries. Not even supervisors like us, nor permanent employees.”

How is it that the appeal worked only in favour of senior management and blue-collared workers? The workers asked: “Every other guideline from the PM came out with home ministry guidelines, which the police implemented strongly. Where were the guidelines for these words of the PM? Why no rules?” 

The Centre did announce two measures as part of Provident Fund rules:

It would pay the EPF contribution of both employers and employees (12 per cent of salary each) for three months. Of the 67 factory-based workers, five had EPF accounts. Even they would benefit only if they receive a salary for the lockdown period.

Second, an EPFO order said employees could withdraw 75 per cent of fund or three months’ salary (whichever was lower) as advance. The five workers did not know how to access their PF account, and claim an advance.

They were unaware of EPF details, including their universal account number, user ID, contact details and how much money is contributed towards EPF.

The Government announced relief on an instrument not yet facilitated to reach even the formal workforce, due to inadequate attention from businesses and the government. 

Among contractual salaried workers in the organised sector, earning less than Rs 15,000 per month, few have EPF accounts and there is literally no concept of any leave. The purpose of the firms is to ensure leaves are dis-incentivised.

Some women workers, when asked about leave, said taking even a day off due to menstrual pain would cost them not only the day’s wage but also a Rs 1,200 monthly incentive. 

Interestingly, the PM’s appeal to corporates is going unheard while the appeals by corporates to the Government seem to be working. The Karnataka government called for Shramik special trains to be cancelled, after prominent builders in the state and many real-estate firms expressed concerns over labour exodus and the worry that they would not come back.

Marx stated in 1844: “The worker, the same as any horse, must get as much as will enable him to work.” And in 2020, not only do the state and businesses not provide the workers with the wherewithal to survive, they are actually holding the workers hostage in a city to profit by rendering them vulnerable.

This is a modern form of slavery at its extreme. It was only due to pressure from the public, trade unions and opposition parties, the Government cancelled this order.

In the interest of corporates, the governments of Uttar Pradesh, Madhya Pradesh, Punjab and Gujarat passed ordinances to scrap protective labour laws.

The UP government formulated and cleared an ordinance that exempts businesses from the purview of almost all labour laws, including The Minimum Wages Act and even The Factories Act for the next three years in an attempt to “provide stimulus” to industries.

The MP government similarly announced that new manufacturing units would be exempt from all but some provisions of the Factories Act, 1948 for next 1,000 days — nearly three years. This will allow more violations of safety and health norms and give more freedom to new factories to employ labourers in any working conditions.

This is disastrous as the exemptions can possibly scrap something as basic as ventilation, toilet breaks, etc — the saleswomen of Kerala had to fight a long battle only for their right to sit while at work.

What now happens to ongoing battles such as those of casual sugarcane workers where women are forced to remove their uterus to be more productive workers? There can be no viable reason to justify such exemptions other than the need to increase profits.

Many of the current mandatory provisions will now no longer be entitlements — but subject to negotiation between workers and the company. This will now be located under the garb of choice available to workers to take up or reject employment, with the worker having no bargaining power. Can it really be called choice? 

The Economic Surveys have repeatedly stressed the need to convert ‘bad jobs’ into ‘good jobs’ by making labour laws — including those related to social-security benefits, minimum wage, leaves and right to association — implementable to this category in the real sense.

The COVID-19 situation makes these laws more relevant; as workers with more spare income would drive spending, which would drive the economy. Instead, what the governments do is pass Ordinances that exempt firms from following labour laws for three years!

Daily-wage casual labourers, including those who work under a piece-rate system, do not have any promise of secure jobs or salary. Most labour laws related to wage and social security are flouted due to the total absence of any monitoring mechanism. They have been left under the control of market rules.

Again, as pointed out in the Economic Surveys by planners, experts and economists, the need is to formalise this segment of the economy. Trade Unions have been demanding unionisation of informal workers to enhance their collective bargaining power.

None of that is happening. Instead, the laws that are supposed to be implemented for them, are no longer mandatory. 

Large businesses have been almost unanimous in appreciating these ordinances. Businesses are talking the language of investors. Evidently, the businesses have created two kinds of employees: One, core senior management employees and two, contractual employees.

The senior management is the extension of investors. The contractual employees have almost become part of the supply chain, which is in any case not seen by businesses as its responsibility.

The challenge is to make businesses view every worker, including at the end of the supply chain, as an integral part of its business. The contractualisation of labour and increasing sub-contracting models, with the absence of protection for workers, will further commoditise labour.

Given that casual labourers comprise largely the marginalised identities within castes, tribes, genders, religions and children, their social, economic and political marginalisation prevent them from asserting their rights as workers, even in accordance with the Constitution.

COVID-19 necessitates the provision of relief to millions of its citizens who are deprived. The government needs to understand that the deprived citizens who require relief and the workers whose rights and income are being denied, are the same.

A smart government should use labour laws to ensure that worker gets more income and social security. An increase in minimum wage and social benefit to the informal workforce, at this point of time, is the best form of relief one can think of.

Not only is it in the interest of the economy, but also sustainable.

The government has to step away from its role of a regulator that is succumbing to the pressure of businesses and deregulating in the name of ‘ease of doing business’. Instead, it is time the government recognises its power as procurer / consumer and as investor.

Public procurement accounts for more than 25 per cent  in India’s gross domestic product. Government of India is the biggest consumer. Given the volume of procurement, it can demand from businesses their compliance of labour laws and, even beyond, respecting responsible production aligned with human rights.

The state can become a model procurer, setting standards for demanding compliance from businesses.

Further, when globally, the businesses and investors are struggling, it is time the Government understands its role as public investor and public lender. Leveraging existing public sector enterprises to fill the spaces that are now deserted by existing investors and businesses should be the priority.

There requires setting up of more public sector units to take up tasks to get the economy back into growth mode. The state needs entities that would be the trusted by public investors and lenders — who else, but state enterprises?

This requires recognition that the persistent pressure for ‘more flexibility’ in labour laws is no longer the feasible economic model. The need is to bring the state back into the business as a responsible procurer, responsible investor and responsible producer — not to create a monopoly but to stabilise and to set new progressive benchmarks, including that of workers participation in management.

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