Go beyond ritual

The call for more flexibility in the labour market is to adjust to a more competitive global economy

Yet another May Day ritual was observed. The governments have once again promised welfare measures for the workers. Leaders showered empty praises on the working millions. Trade unions took out rallies, held meetings to express solidarity and unity of the working class. Leaders avowed to guard the interests of the workers. But, what was missing? An honest introspection of the conditions of working class.

The trade unions are yet to realise that the condition of the workers is intimately related to the status of the economy.Efficiency and productivity have no ideology. The work culture in the organised sector, especially the public sector, often proves to be detrimental to the efficient growth of the economy. Unionisation of labour is often proving to be an impediment in the process of weeding out inefficiency.

This work culture is strengthening the argument that secured employment is a hindrance to economic growth. The protagonists of labour reforms thus refer to the rigidity in labour market as an obstacle to investment and growth. But an introduction of flexible labour laws should be preceded by two conditions. There should be an alternate employment market available to absorb the displaced work force. A strong social security system should be in place.

India is still far from reaching this goal. Hire and fire policy in such a milieu can lead to labour unrest. Therefore, the economic policy should balance a flexible labour regime and a productive economy so as to generate greater livelihood opportunities. For growth to be inclusive, it must create adequate livelihood opportunities and add to decent employment commensurate with the expectations of a growing labour force.

Much larger numbers of educated youth will be joining the labour force during the Twelfth Plan and in the years beyond. The pace of job/livelihood creation must be greatly accelerated. Rather than rigidity or flexibility in the labour market, durable and quality employment is a much better guarantee to labour welfare. The call for more flexibility in the labour market is to adjust to a more competitive global economy. Growth is the legitimising principle used to defend labour reforms. But, the critics of labour reforms have altogether different perspective.

In an article entitled, Deregulating Capital, Regulating Labour (Economic and Political Weekly, June 28, 2014) Atul Sood and others argued,” Labour, operating under increasingly vulnerable conditions, with scant social security nets and inadequate legal backing finds itself subject to the vagaries of the market with precious little to fall back on… The need of the hour, thus, is not to press for further relaxations, which would only exacerbate the precarious existences of those in the labour force but to work towards securing and safeguarding the employment conditions of labour in the country.” A broader social dialogue is needed to arrive at a consensus.