WFTU Seminar: Rights at work and social protection in the Asia-Pacific region and evaluation of social dialogue in these countries. Dhaka, Bangladesh, December 22-23, 2009
22 December 2009
On December 22-23, the Asia-Pacific Regional Office and the Bangladesh committees of World Federation of Trade Unions (WFTU) co-organised a trade union seminar in Dhaka on the subject: Rights at work and social protection in the Asia-Pacific region and evaluation of social dialogue in these countries.
Around 30 delegates from different countries including Australia, Nepal, India, Vietnam, Sri Lanka and Pakistan attended the seminar.
The following background paper was distributed at the Seminar:
RIGHTS AT WORK AND SOCIAL PROTECTION IN AISIA-PACIFIC REGION AND EVALUATION OF SOCIAL DIALOGUE IN THESE COUNTRIES.
- H. MAHADEVAN
SOCIAL SECURITY/SOCIAL PROTECATION
The root cause of social insecurity in many Asia-Pacific countries is poverty and that is largely due to lack of adequate employment opportunities. It is described as ‘chronic or structural social insecurity’, a ‘first order’ type of social insecurity arising from insufficient degree of overall economic development. It is associated with other conventional contingencies such as the loss of employment, disability, old age, death etc. which are called the ‘second-order’ type of insecurities or conventional social insecurities. Both will have to be addressed by the Governments, towards which the working class/trade unions will have to strive by various means.
Asian economy, according to some “elite” studies, has done well during the last decades or so. According to them “the emergence of the “East Asian tigers” on the world economic scene four decades ago and the rise of China & India as major economic powers in the region has significantly altered the contours of the world economy and they feel that the centre of gravity of the world economy would shift to Asia.” Asia, however, is a heterogeneous region with varying levels of economic development and accordingly employment characteristics also differ from across the country. As a whole the success measured in terms of GDP growth and poverty reduction in the last three decades, particularly in the East and South East Asia does not seem to have led to more and better employment. In these parts, unemployment and underemployment still loom large. But for a few select East Asian countries, the employment growth has lagged behind the output growth. Further in most Asian countries, the bulk of employment has been generated in the informal sector whose quality of employment is unsatisfactory or poor. In fact Asian countries are facing severe challenges with respect to employment creation. In terms of characteristics of unemployment the developing countries of Asia have almost similar feature, i.e., relatively very high incidence of unemployment among the youth in these countries has been a cause of concern. It is naturally being felt that the positive energies of growth would be diverted in negative directions. Some of these countries appear to have formed ‘Youth Policies’ to address the overall development and utilisation of their youth power. Another important aspect of unemployment situation is the highest rate of unemployment even among the educated persons. The differences in unemployment rates clearly indicate large magnitude of mismatches in the labour market that exist between the expectations and available employment opportunities. This underscores the need for employment strategies to focus not only generating quality employment, but also to develop a vibrant education & skill development system, in addition to certain basic social structure issues.
The Coexistence of low levels of unemployment and high levels of poverty explains the existence of “working poor”. According to ILO nearly half of workers in the world are not earning enough to lift themselves and their families above the US$2 a day poverty line, and that around 20% unemployed in the world (around 23.3% of the developing world’s workers) are currently living less that US$1 a day. At the regional level it is as high as 55.8% workers in sub-Saharan Africa and 38.1% in South Asia who are living less that 1US$ a day. The percentage shoots up to as high as 89.1% and 87.5 percentage respectively with the poverty line of US$2 per day.
There are various forms of gender discriminations in areas such as education, health, mobility, employment and decision making and the overall participation of women in the ‘labour market’ remain low. This speaks revealingly of the absence or lack of Right at work and Social Protection as far as women workers are concerned. These details would be placed by the participating trade unions in their country reports.
There is asymmetry between the freedom of movement of Capital, especially finance capital on the one hand, and the restrictions placed on the movement of unskilled/semi-skilled labour from the developing countries. Available evidence suggest that labour migration as a proportion of the total world population has been lower in the current phase under globalisation. In fact capital searching for destination of cheap labour is the order of the day now. There are still countries in Asia, riddled with widespread unemployment and poverty that are exporting their labour to other countries. Examples of Bangladesh, Philippines and Indonesia from where a sizable number of labour force migrate to Middle-East and other countries and women and children comprise a sizable proportion among them. These migrants are largely unskilled and semi-skilled persons. An alarming situation associated with the migration relates to increasing number of trafficking of women and children in the name of oversees employment. India, Nepal, Pakistan and Sri Lanka also have contributed to this type of migrant labour who have undergone hardship and inhuman conditions of work in the recent periods. Reports of unrest and demonstrations, followed by the interferences of the Govts., of both sending and receiving countries are also seen in the last few years.
EMPLOYMENT AND OTHER RELATED ISSUES:
Australia:
“Unemployment has been a scourge for Western economies, including that of Australia, since the end of the post-war boom in the early 1970s. The business cycle of boom and recession in market economies was, for decades, a cause of high and seemingly intractable unemployment. Unemployment shot up in recessions, as businesses closed or shrank and restructured. It took many years to recover from the shock of recession, by which time another recession was in the horizon. In the past 13 years before the recent worldwide melt down, Australia has, through a combination of luck and good macro-economic management, avoided a substantial recession. The gain from this success is a steadily falling overall rate of unemployment. This fall in unemployment had benefited substantial group in the labour force, including youth, older workers, and the long-term unemployed.
The successes on the unemployment front are tempered only by some confounding developments that are making it hard for some groups to obtain adequate hours and continuity of employment. The two main problems are the challenging falls in job opportunities for men who have relatively low levels of formal education, and the substitution of part-time for full-time employment. The former has led to the substantial withdrawal of prime working men from the labour force. The latter has resulted in substantial underemployment, where many workers want more hours of work. If it is possible to keep the economy running at its current level of capacity utilization, without stirring the inflation dragon from its slumber, then even the less educated men, youth and part-time workers can expect to find reasons for optimism in the future.”
Bangladesh:
“The problem of unemployment in Bangladesh is very acute. It has many dimensions: temporal (short term and seasonal vs. long-term and structural); spatial (rural vs. urban); secto ral (farming vs. non-farming) and among different socio-economic groups (the landless, the educated, etc.). Open unemployment was low at 4.3 percent in 2003—it was higher among females (4.9 percent) than males (4.2 percent) (ILO, 2007). This is mainly because people often find part-time or short duration work. On the other hand, the inci dence of underemployment is very high, estimated to be around 35–40 percent of the total labour force. In the past, agriculture, espe cially the crop sector, played a dominant role in the generation of employment opportunities in the economy. The seed-fertilizer tech nology emerged as one of the major sources of incremental employ ment. Bangladesh Bureau of Statistics (BBS) suggests that in rural areas, 40.5 percent of the males and 19.2 percent of the females are self-employed and another 21.3 percent and 13.4 percent of the males and females respectively are helping themselves as unpaid family workers. Even in urban areas, the proportion of self-employed or unpaid family workers is as high as about 43 percent (BBS, Labour Force Surveys). There persists a considerable degree of underemploy ment as reflected in low weekly earnings of workers. Per person earn ing was less than Tk. 100 per week for more than 18 percent of the labour force—about 13 percent are in urban areas, and nearly 20 per cent in rural areas. Moreover the disparity in such earnings between males and females are quite high—12 percent males and more than 49 percent females earn less than Tk. 100 per week. This is true both for rural and urban areas. Thus, the dependency ratio and male-female differentials in wage earnings are very high, keeping per capita income low. Moreover, the fragmented nature of agricultural labour market results in large seasonal variations in labour demand. Because of the predominance of the practice of hiring labour on a daily basis, the agricultural wage labourers suffer from serious seasonal fluctuations in employment.
Youth - Nearly 18 percent are within the age group of 15—24 years and 14.23 percent belong to the age bracket of 25—35 years, around one-third popula tion of Bangladesh can be identified as youths. According to a report published by the Ministry of Youth & Sports, Government of Bangladesh, 1.67 million are unemployed. A large proportion (nearly two-thirds) among them has educational qualifications of degree level and above. The rest belong to the groups having primary and second ary level of education (ILO, 2007). The important explanation for the prevailing high rate of unemployment among the educated must come from the demand side, which has not grown apace with supply. In general, the educational system is geared to create `degree holders’ with little value in implanting dynamism in the economy. It produces more `generalists’ than needed, but not enough professional and technical persons. The educational system is oriented towards present `social needs’ valuing degrees and certificates as a status symbol, rather than creating skills and expertise needed for overall development. There is another serious implication of the high rate of educated unemployment and underemployment. It is breeding social ills like violence, religious fundamentalism and terrorism that in turn hinder development.
Because of the socio-economic conditions and lack of opportunities for productive employment at home, Bangladesh has been exporting unskilled, semi-skilled, skilled, highly skilled and specialist categories of manpower for the last two decades. They are making great contributions to the development activities of the recipient countries. Bangladesh thus acquires much needed foreign exchange. The flow of official remittances during 1976 to 2002 was USD 22.33 billion. In the financial year 2003-04, the volume of official remittances was USD 34 million. It is relevant to note here that for the first time in year 1993-94, the amount of official remittances was only USD 10 million.
CONDITIONS OF MIGRANT WORKERS IN GENERAL:
The prospect of migrant labour market has changed considerably over the period with the emergence of new sources of supply such as Nepal, Vietnam and several Sub-Saharan countries, and changes in the political and economic fundamentals. The stiff competition has pushed down wages by almost 50 percent in some sectors, ultimately slashing migrant workers’ rights and privileges. This trend is obvious in the Middle Eastern countries. The Asian crisis also blocked the growth of an expanding market. Labour absorption in Malaysia, for example, has witnessed a severe decline in the recent past. There are concerns that the expansion of European Union by inclusion of more countries in the net may curtail the demand for labour from Asia.
The cost for overseas employment is too high in terms of isolation of the migrants from the country, society and family and the trauma that accompanies this, besides the loss of skilled manpower for the home market. The sacrifices that the country of origin and the migrants make should receive due recognition and the problem they face should be redressed as dictated by the norms of human rights, international conventions and local laws. There is another spectre of uncertainty that haunts the migrants. It is the question of rehabilitation on returning home. Most of the labour exporting countries are so much beleaguered with unemployment problems that the scope for innovative and productive programmes of rehabilitation of the returnees is very limited.
Indonesia:
“Indonesia has a high growth of labour force as a consequence of rapid population growth and limited development of social and human resources during the past decades. Moreover, a rapid decline of econ omy during the crisis of 1997-98, has widely affected the quality of people’s life, including declining labour demand, massive layoffs, and shrinking formal employment. This situation continues confirming Indonesia as a labour surplus country, due to limited productive working opportunities created by slower economic growth against the growth of new entrants in the labour market.
Indonesia has continually faced rising unemployment rate. The official open unemployment rate has been slowly increasing since the economic boom of 1990-95, and showed remarkable increase during the crisis. It was reported in 2005 that more than 10 percent of the total labour force in the country was unemployed. However in Indonesia’s case, open unemployment rate is only part of the problem. Another serious issue is underemployment, which affects a much larger part of the population and triggers poverty among the labour force. Continued high rate of underemployment is indicated by insufficiency of empowered people’s potential and the working poor. The main issue concerning underemployment deals with high percentage of people involved in informal sector that has expanded during the recession, while employment in the formal sector is declining. Open unemployment also consists of a large number of youth who are mostly looking for their first jobs. Other issues concerning unemployment deal with particularly vulnerable groups such as women, youth and migrant workers. Based on the complex nature of unemployment and related aspects, Indonesia confronts big challenges to find ways in reducing unemployment as well as poverty. Policies that support productive job creation and effective human resources development are essential for Indonesia to overcome the problems.
Indonesia is also having deep concern in its efforts of sending its progressive labour force to overseas, particularly when the country suffers from severe economic downturn. Large-scale external migration could be an instrument to solve the unemployment problem within the country and to generate income. Both unemployment and poverty are potential sources of social and political unrest. Another important reason which has been explicitly included in the government policy is to qualify workers for overseas jobs with the objective of raising foreign exchange through remittances. This is supported by developments in global transportation and communication facilities, which provide easy access for surplus labour countries to benefit from labour opportunities in labour shortage countries. The increasing number of migrant workers from Indonesia since the 1980s has encouraged the government to take up an initiative to improve regulations concerning placements for overseas labour.
The terrible economic recession in 1998 continued to confirm Indonesia’s reputation as a labour surplus country due to the excessive number of new entrants in the labour market in opposition to the lower demand for labour. These worsening conditions led Indonesia to face a serious problem of high level of unemployment, both open unemployment and underemployment. The incidence of open unemployment has continued to be more pronounced among women, educated workforce and the youth than among men, less educated workforce and older age groups. More open unemployment incidence has also continued to take place in urban areas than in rural areas, in contrast with underemployment incidence, which is more pronounced in rural areas. High underemployment rate is a more serious problem because it underutilizes people’s potential and becomes the main factor behind emergence of the working poor. Almost half of Indonesia’s labour force arc involved in informal sectors, which are regarded as poor productive work and women are employed there in the highest percentage. This condition creates problems of low quality jobs and discrimination at the workplace, especially for vulnerable groups such as women and the youth. These problems are aggravated by the unpopular policy of cutting down oil subsidy, which reduces purchasing power and increases the incidence of poverty.
Based on the complex issues of unemployment and related aspects, Indonesia confronts big challenges to find ways in reducing unemployment as well as poverty. The employment policy should focus on more productive job creation and underline priorities, effective policy for human development resources and policy and protection for the more vulnerable groups. It will be difficult to do so unless employment concerns are reflected in macro-economic policy. This policy includes developing a conducive climate, laws and institutions, as well as rehabilitation of infrastructure. Hence, Indonesia needs to have a comprehensive policy and strategy to increase the number of productive jobs based on the best possible options. As a surplus labour force country, Indonesia will continue to be a labour exporting country and will attempt to take benefit from overseas employment, but simultaneously laying down protection scheme for the working migrants.”
Japan:
“40% OF UNEMPLOYED OUT OF WORK FOR MORE THAN SIX MONTHS”-
A Study:
A recent labor union survey of unemployed reveals that 40% have been out of work for more than six months and that they urgently need new jobs. In order to understand the real situation of the unemployed, the National Confederation of Trade Unions (Zenroren) asked its local member unions across the nation to conduct a questionnaire survey in front of the building housing the Hello Work Office (Public Employment Security Office). Zenroren received 2,028 responses as of October 31, 2009. Among them, 46% are 50 years old and over and 34.7% are under 40 years old.
Dismissals, bankruptcies, and termination of employment before workers’ contracts expire account for 40.4% of the reasons for losing jobs. 19.2% of respondents said that companies had forced them to quit jobs voluntarily although companies had laid them off. This clearly shows companies’ arrogance. Most contingent workers can receive unemployment insurance benefits only for 90 days. Extending the term of benefit payments is an urgent demand.
The fact that 16.4% of the unemployed are ineligible for unemployment benefits indicates the need to extend the unemployment insurance coverage to more workers. The rate of those who receive the benefits is only 47.4%. As for what they want, 57% answered that they want to urgently find a job. Others demanded that the government prolong the term of unemployment insurance benefit payments, improve public support for finding a job, and prevent companies from dismissing workers.
Commenting on the survey result, Zenroren Secretary General Odagawa Yoshikazu said, “The survey result illustrates how severe the employment situation is. The government is required to take measures to make a recovery in the employment situation. Our urgent task is to urge big companies to stop cutting jobs and terminating workers’ contracts before their contract term ends, and to fulfil their corporate responsibility for creating jobs.”
Philippines:
“One of the failures of the Philippine economy is its inability to generate employment from its growth. On top of a rising labour force, the labour market is now faced with slow growth in employment even as output continues to expand, hence, there is a state of ‘jobless growth’ or an ‘output-employment lag.’ While output growth (measured as GDP) is increasing, it has not translated into higher employment demand. This is contrary to ‘Okun’s Law’, which states that 1 extra point of unemployment costs 2 percent of GDP.
Since the recovery of economy in 1987-89, employment picked up and the unemployment rate tapered. However, the ‘jobless growth’ phenomenon started to set in during the presidency of Joseph Estrada, blunting anti-poverty thrust. This paradox has persisted since 2000. The glaring indication of this divergence is the persistence of double-digit unemployment rate from them on. Before that, during the Asian Financial crisis, many Philippine companies experienced cash flow problems, leading to reduction in their workforce. Years after the crisis, some companies managed to recover and raise their revenues but this trend did not translate into higher employment demand. This is because many companies have found it more cost-efficient to keep a minimum workforce, i.e. with less number of workers, there is higher labour productivity. Several companies have adopted such type of adjustment.
There were 3.89 million unemployed in Philippines in 2004. Since 2000, unemployment rate has been double-digit, posting an average of 11.4 percent during the five-year period. The latest count of total unemployed Filipinos is about 4.2 million, majority of whom - 61 percent - are from the urban areas. The number of unemployed in 2004 grew by 8.3 percent while those who became employed increased only by 3.1 percent.
Unemployment is very high among youth. In 2004, almost half of the total unemployed were between the ages of 15 to 24 years. Another one-fourth came from the age group 25–34 years, while the remaining 28.4 percent were 35 years and above. Considering the capacity of the young people to work, this means a lot of labour productivity is being foregone. This scenario presents bleak prospects for the next generation. Likewise, having a large number of unproductive young people creates a chain of problems such as pre-marital sex, drug abuse, and other crimes; unless, the passions and creativity of the youth are channelled to more productive projects. More than one-third of the unemployed are degree holders. Another 1.7 million (or 42.9 percent) were high school graduates. While 19 per cent or 798,000 finished elementary education, only 2 percent or 96 thousand unemployed did not have any education in 2004.
Solidarity: Key to Addressing the Unemployment Issue
Much has to he done in order to solve the issue of unemployment in the Philippines. In an economy, which is saddled with issues of graft and corruption, solidarity has to be stressed. In the 2001 World Bank-International Monetary Fund study on Combating Corruption in the Philippines, it was revealed that about 40 percent of the yearly government budget goes to graft and corruption while various independent surveys show that about 60 percent of the Filipinos are poor. Given this scenario, the Catholic Church has taken an active stance in helping the poor through its `Pondo ng Pinoy’ programme, a community foundation, registered with the Securities and Exchange Commission (SEC).”
Thailand:
“In Thai labour force survey, the concepts and definitions of the labour force and its components have been changed many times. However, they have been built upon the `casio frame work’ indicated as the combination of employed, unemployed and not in the labour force. According to the National Statistical Office (NSO) of Thailand, in 2005, labour force includes all persons over and above 15 years of age who were employed and unemployed or were classified as seasonally inactive labour force during the survey week. Persons not in the labour force were classified as those who were neither employed nor unemployed or not classified as seasonally inactive labour force during the survey week. Persons not in the labour force comprise of persons who during the survey week, were under 15 years of age (too young to work) and persons above 15 years of age who were neither employed nor available for employment because they were engaged in household work as house wives or engaged in studies as students or too old (above 60 years of age), or incapable of work because of physical or mental disability or chronic illness, or voluntarily idle, or persons who were not members of the same household who are working without pay, profits, dividends or other pay ments, or those who were working without pay, profits, dividends or other payments for charitable organizations and institutions. In addi tion, the seasonally inactive labour force means persons over 15 years of age who during the survey week were neither employed nor unemployed as defined above, but were waiting for employment, or employed without pay on farms or in business enterprises, or engaged in seasonal activities owned or operated by the head of the household or any other members of the household.
The issues of employment and unemployment are related to the dimension of discrimination in the labour market with respect to race, gender, social structure, etc. Discrimination based upon race actually is not a big issue in Thailand, but gender-based discrimination is a fact of Thai life. There is abundant statistical evidence that suggests discrimination: comparisons of males and females revealed substantial differences in earnings, unemployment rates, allocations among various occupations and accumulations of human capital. Hence there would be more unemployment among women than males in both paid and unpaid work and tendency to put women into specific kinds of jobs, which arc generally less remunerative. Moreover, social structures and policies also put women out of the labour force before men and women have less opportunity for training on the job.
GLOBALIZATION AND ITS IMPACT
In the wake of globalization, Thailand has to face with the situation of exploitation of child labour, forced labour and outsourcing workers (foreign workers or alien) with less skills. It has increased pressure on wages and is more likely to reduce the investments in human capital, thereby slowing long-term growth. The economic crisis led to the economic downturn causing the closure of some industries. Consequently, there was an increase in unemployment. It has to establish minimum wages for employment, prohibit forced labour and protect freedom of association and collective bargaining. By following the protection of these rights, trade in the international market would be promoted and should increase incomes and growth generated by the international trade in the future.”
Vietnam:
“In the mid - I980s, the Vietnamese government launched the economic renovation programme (Doi moi). In fact the Doi moi programme is a process of comprehensive transformation of the economy from centrally planned to market oriented. By Doi moi, the domination of state ownership has been replaced by a multi-ownership system in all sectors of the economy. In the agricultural sector, the reforms include decollectivization, redistribution of land to households and output contracting system. In the industry and services sectors, reforms gave more freedom and autonomy to state enterprises and encourage the development of the private sector. Along with the renovation process, the strict state regulation over economy has been relaxed, the dual price system has been removed, state control over foreign trade was also phased out and the economy has been integrated deeper and deeper into the world economy.
Doi moi, in fact, has generated a new momentum for the economy to develop. By the early 1990s, the economy successfully escaped from the economic crisis. The agricultural sector has experienced remarkable improvement as the country turned from rice importer to rice exporter, and now it is among the biggest exporters of a number of products such as rice, coffee, seafood, etc. The state owned sector has been improved, and the foreign investment sector has increased its importance. All of these helped the economy to perform well in the last fifteen years.
The good performance of the economy has had good impact on social development. The country’s one dollar per day poverty incidence fell from 58 to 29 percent between 1993 and 2002 (Vietnam Development Report, 2004) and urban unemployment reduced and stabilized at a rate of about 6 percent. However, the economic development in the past years has exposed some disadvantages, which can cause a negative impact on economic development in general and employment in particular. Till now, the state sector dominated the economy, but many enterprises of this sector have had poor performances. The privatization/equtization for these enterprises are inevitable, and this could worsen the unemployment problem because the labour redundancy in these enterprises is quite large.
The Vietnamese labour force is rather young and this is reflected in the country’s employment trends. The group of people aged less than 35 years, occupies about a half of the total country’s employment. The public sector in Vietnam takes a significant one-tenth share of total employment. Vietnam is still a transitional economy from a centrally planned to a market oriented one of the main features of this transitional economy is that the state sector still dominates the national economy as its GDP share was about 40 percent in recent years. One of the main objectives of economic reforms was to reduce the size of the state-owned sector, especially to dismantle the inefficient state-owned enterprises. There is a great deal of effort given to this area; however success is still limited. The state sector still dominates the economy especially in industries such as telecommunication, steel, air transportation, and others. As a result, the employment in the public sector has not declined; it even increased in recent years. The increase in employment share in the public sector should be noted as it is mainly due to the expansion of employment in the public service sector rather than in the productive sector.
Underemployment is a most common feature in the rural areas. While unemployment is mostly associated with urban areas, underemployment is largely a rural and agricultural phenomenon. Although a large share of the labour force is engaged in agricultural sectors, these people share a very low land area. The Red River Delta is one of the most populated areas of the country. The farmers in the area own only about one thousand square metres per person. This area is too small for people to live in, to this is attributed the underemployment of the region in particular, and the country in general.”
India:
As the trade unions/participants from India in this Seminar will be placing their respective reports on the Indian situation we would not like to give an elaborate report, but only quote a few observations made in the AASSREC Report as indicated below:
“In spite of high GDP growth and employment growth, decline in poverty has been relatively low, at 0.8 percent per annum. Obviously growth has not benefited the poor, nor has new employment gone to them. The Eleventh Five Year Plan (2007-2012), therefore, calls for more `inclusive growth’ and envisages employment as a central element of such growth. While a target of 58 million employment opportunities per year is proposed, the emphasis is on two aspects of employment, i.e. improving productivity and employability of the poor (Planning Commission, 2008).
As compared to a large number of countries, the workforce participation rates (WPRs) in India is low. The WPR was about 42 percent in the country- 54.7 percent for males and 28.7 percent for females, and these rates have been rather stable for a long period of time. Although there are several factors responsible for this low WPR, including social customs, taboos etc., particularly in case of women, this phenomenon has obvious implications for poverty and well being of the people, particularly the poor. Another important aspect to note is the predominance of primary sector in the workforce (around 57 percent) which is almost entirely employed in agriculture and related activities (mining and quarrying, account for only 0.6 percent of the total employment). Secondary and services sectors contribute only 18 and 23.9 percent of the total workforce respectively. In rural areas, nearly three-fourths of the workforce are still engaged in agriculture and related activities.
Further, contrary to the historical development experience of the present developed countries as well as of large number of developing countries the pace of diversification in the workforce has been very slow in India. During the three decades beginning from the early 1970s till 2004-05, there has been only a 17.3 percentage points decline in the workforce engaged in agriculture and related activities and consequently slow increase in the proportions of those engaged in secondary and tertiary activities (around 7 and 9 percentage points, respectively). On the other hand, the share of agriculture and other primary activities in the total Gross Domestic Product (GDP) has declined at a faster pace from around 48 percent in early 1970s to only around 20.8 percent in 2004-05.
The Indian economy registered employment growth rate of 2.13 percent per annum during the period 1972–73 to 2004–05. Before the liberaliza tion of the economy in 1991, growth rate of employment was 2.04 per cent per annum during 1983 to 1993–94. There was a deceleration of employment growth to 1.85 percent per annum during the post-reform period 1993–94 to 2004–05. The employment growth rate slowed down perceptibly in the immediate post-reform period 1993–94 to 1999–2000 compared with 1983 to 1993–94. Except for construction, employment growth deceler ated in all major sectors of the economy. The most precipitous decline was in the growth of employment in agriculture, which declined from 1.41 percent per annum during 1983 to 1993-94 to only 0.06 percent per annum during 1993-94 to 1999-2000.
Available evidence suggests that over time, there has been deterioration in the quality of employment, particularly so during 1990s. The quality of employment can be judged from criteria such as status of employment, informalization of employment, labour market flexibility as well as earnings. An important aspect of poor quality of employment is a very large size of unorganized workers, which is increasing over the years. As high as 92.4 percent of workers are working in the unorganized informal sector (NCEUS, 2007). During the period 1999–2000 to 2004–05, 60.9 million new jobs were created. About 52.3 million jobs were created in the infor mal/unorganized sector, whereas 8.5 million jobs were created in the organized sector. But, the irony is that all the 8.5 million new jobs created in the organized sector were of informal in nature (NCEUS, 2007). This is because unlike the other workers in the organized sec tor they did not enjoy any job or social security benefits. The result is that despite high growth of employment, the entire increase in work force has joined the large army of unorganized/informal workers with poor conditions of work and lack of social security.
It is well-known that quality of employment—in terms of earnings, regularity of employment, work environment and social security—vastly differs between the organized and unorganized sectors. Workers in the organized sector enjoy relatively better wages and salaries, job security, reasonably decent working conditions and social protection against such risks as sickness, injury, disability and death arising out of hazards and accidents at work, separation and old age. Those in the unorganized sector generally have no protection against these risks, have low earnings, often lower than modest statutory minimum wages with no regularity, leave aside regularity of jobs. An increase in the share of unorganized employment of obviously means an overall deterioration in the quality of employment. The more worrisome feature of employment growth in organized sector is increasing number of contractual workers with hardly any social security benefits, thus resulting in rapid deterioration in the quality of employment therein. The proportion of such workers in the organized sector significantly increased from 37.8 percent in 1990—2000 to 46.6 percent in 2004—05 (NCEUS, 2007).
With regard to female workforce, the downtrend in the labour market further worsens their condition because of the gender-specific exclusionary processes. Although some studies highlight the increasing feminization of labour force, but the overall trends in the growth of employment of women in rural and urban areas during the second half of 1990s showed a faster decline in their employment than men.
A detailed analysis of NSS data in conjunction with micro-level data shows that the so-called `feminization of work’ may be associated with the increasingly precarious livelihood for women. The shift from casual employment to self-employment to a substantive extent in recent years (2000—2005) may not necessarily mean a significant improvement as it has largely been confined to subsidiary status employ ment. The home-based subcontracted jobs with piece-rated payment that the women largely get forces them to work long hours for a pittance without any non-wage benefits.”
DESPITE ECONOMIC GROWTH INEQUALITY PREVAILS:
“India has been experiencing a growth rate in output of some 7-8 per cent , but the growth in regular employment has hardly exceeded 1 percent. This means most of the growth, some 5-6 percent of the GDP does not come from employment expansion, but from higher output per worker or labour productivity. According to official statistics. between 1991 and 2004 employment fell in the organised public sector, and the organised private sector hardly compensated for it. In the corporate sector, and in some organized industries productivity growth comes mostly from mechanization and longer hours of work. Edward Luce of Financial Times (London) reported that in the Jamshedpur steel plant, the corporate giant Tatas employed 85 thousand workers in 1991 to produce l million tons of steel worth 0.8million U.S. dollars. In 2005, the production rose to 5 million tons, worth about 5 million U.S dollars, while employment fell to 44 thousand, implying an increase in labour productivity by a factor of ten. Similarly, Tata Motors in Pune reduced the number of workers from 35 to 21 thousand but increased the production of vehicles from 129,000 to 311,500 between 1999 and 2004, implying labour productivity increase by a factor of 4. Stephen Roach, Chief Economist of Morgan Stanley reported similar cases of Bajaj motor cycle factory which employed 24 thousand workers to produce l million units in mid-1990s , while aided by Japanese robotics and Indian information technology, in 2004, 10.500 workers turned out 2.4 million units, i.e. an increase in labour productivity by almost a factor of 6. One could go on with many more such examples from the ‘efficiency’ achieved through mechanization and labour shedding by corporate world, but the macro economic implications of such micro efficiency at the factory level are seldom highlighted.
The whole organized sector accounts for less than one-tenth of India’s labour force and the corporate sector about one third, i.e. hardly 4 percent. Simply by the arithmetic of weighted average, a 5-6 per cent annual growth in labour productivity in the entire economy is possible only if the unorganized sector accounting for the remaining 90 per cent of the labour force also contributes to the growth in labour productivity. Several micro studies and surveys indicate that the growth of labour productivity in the unorganized including most of agriculture, comes from lengthening the hours of work, as this sector has no labour laws worth the name, or social security to protect workers, while the category self-employed workers, totalling 260 million have to ruthlessly exploit themselves and their families for survival. This is the fastest expanding category during the high growth regime. Sub-contracting from the corporate to the unorganized sector coupled with casualisation of labour on a large scale has become another convenient device to ensure longer hours of work without higher cost.”
THE OVERALL SITUATION IN THE REGION:
The above situation appears to be the same in respect of other Asian-Pacific countries also which are not specifically indicated in this background paper. The consequence of neo-liberal globalisation is that the emergence of “Business in the driving seat, Corporations determines the Rules and Govt. behaves as referees, enforcing rules laid by others. Under this order, “the Corporates/MNCs and not necessarily elected Govts. hold power.” This naturally results in “PROFIT over the People, as against Profit for the People.” This explains directly and indirectly the existence or otherwise of the Rights at work and Social Protection in the Asian Region.
For example, when one talks of 9.2% growth rate, it becomes a statistical abstraction. At times, only 0.2% of the people are growing at 9.2% per annum and there is a very large number whose growth rate is nowhere near.
All these obviously reflects the sad state of Rights at work; the Social protection becomes vulnerable, though every country has plethora of Labour Laws, most of which remain unimplemented or implemented only with respect to a small number of workers in the organised sector.
The ILO’s Decent Work should be seen in this context. Its four pillars or four dimensions : (i) “Contents of Employment (ii) Workers Rights (iii) Social Protection and (iv) Representation or dialogue” are fully or partially absent in many Asian countries. According to ILO, only 10% of the jobs are secured. ‘Trade Union Free Environment’, “Trade Union bashing” in the organised sector, etc. are encouraged by the Govts though statutes and Rules framed thereunder speak differently.
The situation in several countries has revealed, over the years, “Closed Plants, Ruined Communities, Successful ideological Warfare of the Right, Dismantling Social Welfare states, Privatisation of public sector/services, De-regulation, Regressive Taxation, Structural Adjustment, Outsourcing and off-shoring of work, Anti-workers trade agreements, Direct Violence against the workers, Flexibilisation, Hire & Fire, No laws in the EPZs/SEZs/IT Sector, Elimination of all forms of socialised consumption.”
The recent melt down/economic crisis arising from Wall Street affected All Streets including the Asia-Pacific countries. Millions of job losses was the result, both in the organised as well as unorganised sectors, in particular in the Export oriented industries. Investments were attached with open or concealed conditionalities including “No trade unions”, besides other obnoxious conditions.
While the number of strikes have come down in these countries in the recent years, the closures, lockouts and other forms of employers offensive have gone up, escalating social tensions. At times, the limited reactions of the affected workers is sought to be construed by the employers and the Governments as “Return of Militancy”.
SOCIAL SECURITY-STATUTE AND REAL:
According to ILO, Social Security is required for meeting the following types of contingencies:
“(i) Unemployment (ii) Sickness (iii) Employment Injury (iv) Maternity (v) Invalidity (vi) Old-Age (vii) Death (viii) Emergency Expenses.”
When the job loses took place, the workers, particularly in the informal/unorganised sector could not get the compensation towards job loses or other social security requirements. Despite several laws applicable to the small sections of the workforce in each country, large number of them did not get these social security measures, such as the unemployment reliefs. Constitutions in each country have provisions, binding or non- binding, (e.g. Directive Principles of State Policy in India) for social protection, but they remained as ornamental provisions, incapable of getting implemented.
A few years ago, in a Supreme Court brief, the US Chamber of Commerce of the National Association of Manufacturers argued that “ILO Convention represented a National Security Threat” by restricting US Sovereignty.” The employers in other countries also, including those in Asia-Pacific demand “Labour Reforms” obviously to restrict the Freedom of Assn., Right to Collective Bargaining, and also demanding or already implementing flexi-policies, hire-fire, non-enforcement of laws in the Spl. Economic Zones, ostenably for the “purpose of competing in the market.”
In one of the (in) famous judgements, the Supreme Court of India ruled that the Govt. employees and Teachers of a particular state (Tamil Nadu) who resorted to strike for retaining what they already had, that “these employees have NO MORAL, LEAGAL, ETHICAL RIGHT TO STRIKE”, as 1,50,000 of them were facing outright dismissals for having gone on strike. There are several such examples of judicial pronouncements throughout the Asia-Pacific Region.
The Global Wage Report 2008/09 (Minimum Wage and Collective bargaining: Towards Policy Coherence) says as follows:
“A general trend is that wages have grown at substantially slower pace than GDP per capita. A majority of countries registered a decline in the share of national income that goes to wages, suggesting a lag between the growth in productivity and the growth in wages. The report also presents evidence to suggest that while wages do not increase as fast as overall economic growth in upswings, they slow more rapidly in downswings. If this pattern were to be followed in the rapidly spreading global downturn that has accelerated in 2008 it would deepen the recession and delay the recovery.
Most countries also display in increase in wage inequality, with top- wages tending to increase much faster that those of the large majority of wage earners. Countries with a higher coverage of collective bargaining tend to have a narrower dispersion of wages. The report also describes “Strong Economic Growth, but a gloomy outlook”.
On ‘Collective Bargaining’ coverage the above Report observes of contrasting developments. The survey reveals that in Asian Countries it is usually below 15 per cent, and often in fact below 5 percent. The table presented for Collective Bargaining Coverage, for example indicate “East Asia-Republic of Korea – less than 15%; China – between 51-70%; South Asia-Nepal-less than 15%; India – 15 to 50%; South East Asia – Indonesia, Malaysia, Philippines, Singapore and Thailand – less than 15%.”
In regard to Minimum Wage and Collective Bargaining, the ILO study observed “that in Vietnam, the wages of all types of workers are fixed through a multiplies of the minimum wage, with all social benefits also being related to minimum wage. But some confusion also exists in other less centralised countries. In Indonesia, most wages in the formal sector are ultimately clustered around the minimum wage and hence not much bargaining takes place after the announcement of minimum wage by the local govt. Similarly in Philippines the Regional Boards seem to have supplemented firm-level wage bargaining and companies now simply wait for the annual wage adjustments by the Board rather than negotiate with the workers. There are other examples in South Asia – such as Bangladesh, Sri Lanka and India – where the governments set a series of minimum wage for 45 occupations and activities and where local governments do the same at local level, resulting in an estimated 1230 occupations and sectoral minimum wage rates across the Country. However, the unanswered questions are whether these notified minimum wages are strictly enforced in all sectors, whether there is a perfect mechanism to enhance them periodically with reference to the increase in prices etc. For example, in India, the nationally accepted principle of fixation of NEED-BASED MINIMUM WAGE (as per the 15th Indian Labour Conference of 1957) based on certain norms at the current level of prices is NOT implemented anywhere is the nation.
Consequently we have to demand and strives towards
- Pro-labour laws, Governance as well as judiciary
- Union recognition a ‘must’ under law and practice.
- Job security as well as income security.
- Unemployment benefit/rehabilitation is an unassailable ‘right to life.’
- Investments should result in job creation and not job reduction.
- Standards of ILO to be ratified as well as incorporated in the national laws.
- Ensure strict enforcement of labour laws in all sectors, including in MNCs, EPZs etc.
- Application of Core Labour Standards in labour laws & practice is a pre-requisite.
- Productivity gains should be translated into better pay and improved service conditions.
- Effective Role of trade unions in Social Dialogue.
- Payment of Minimum Wage (‘Need based’ leading to ‘Fair Wages’) to be made a Constitutional guarantee in every country .
- immigrant workers should get the full rights as applicable to the citizens of the receiving country.
- “Equal Pay for Equal Work”, whether performed by permanent workers/contract, casual workers/contingent workers.
SOCIAL DIALOGUE
It is generally observed that in all these countries of Asia-Pacific Region, the organised workers who are able to form Unions have access to social dialogue and collective bargaining process, subject to several restrictions and limitations, legally or otherwise.
Of late the number of settlements used to be entered before the collective bargaining machinery has been declining and seldom encouraged. The unions’ priorities have been forcibly altered resulting in a situation of protecting the existing rights & benefits in place of gaining the new ones. This has resulted in ‘Concession Bargaining’ instead of ‘Collective Bargaining’ Political partisanship also play its insidious part resulting in victimisation and harassments of all sorts.