India is the world's fastest-growing major economy with the largest youth population. Indian government plans to create 20 million jobs a year for the next five months, by focusing primarily on manufacturing.
However, International Labour Organisation's Director-General Guy Ryder feels that thus far, there is little evidence to suggest that the Indian economy will mirror China's story – where an agrarian economy gave way to a manufacturing-led one – or that the manufacturing sector will absorb youth across the spectrum of skill levels and education.
In an interview with Scroll.in, Ryder, who visited India recently, said that given the wide social disparities in the country, policy-makers, while pushing growth, will have to simultaneously focus on rural workers and bring about gender parity in wages. He also spoke of how the future of work may look for migrants workers, contract labour in informal sectors, and workers in the new sharing economy – adopted by companies such as Uber and Airbnb.
Excerpts from the interview:
India has one of the fastest-growing economies in the world, but only 27% of our women are in the workforce, which puts India second from the bottom among G-20 countries, above only Saudi Arabia. What could be hindering women workers?
In India, between 2005 and 2012, women’s participation rate slid from 37% to 27%. Research by the International Labour Organisation and others has identified a number of reasons. Women do more unpaid economic activities within homes – meaning their economic contributions are often simply not counted.
At the same time, while employment in agriculture is falling overall, it is happening faster among women. Between 2004-'5 and 2009-'10, more than 20 million women left the agriculture workforce, compared to five million men.
Moreover, jobs are not being created in locations or sectors that are easy for women to access or enter. There exists a considerable gap between what men and women are paid for the same work and this discourages women from participating. Increased educational enrolment of young women has also contributed towards a decline of women in the workforce.
In general, however, it should be getting easier for women in India to join the workforce; they are now better educated, have fewer children and live in a growing economy. But more needs to be done to get a higher number of women into the workforce and allow those who are there to make maximum use of their talents and energy and get paid properly for doing so. Preventing them from doing this restricts the prospects of future national social and economic growth.
Prime Minister Narenda Modi's government launched the Make in India programme to encourage manufacturing in the country and improve the sector’s share in the economy from the current 11% to closer to China’s level of 30%. How do you view this shift from an agriculture- and services-based economy to one that emphasises on industrial manufacturing to drive economic growth and jobs?
The Indian government does attach a lot of importance to the development of the manufacturing sector, which is why you have national initiatives like Make in India and Skill India among others. This sector does indeed help in assuring better-quality jobs.
It is commonly said (by academicians and policymakers) that rapid economic development requires industrialisation. Some pockets of manufacturing have done very well in India, such as the automobiles sector. However, the shift of output and workers from agriculture to manufacturing has not followed the same path in India as was seen in China and elsewhere.
The bigger challenge is whether manufacturing in India can absorb large numbers of unskilled workers – this continues to be an issue as manufacturing becomes more capital and skill-intensive.
It will be important for India to promote greater industrialisation if it is to meet the macroeconomic and labour market objectives outlined in the Make in India initiative. But India also needs to address the issue of increased informality (workers in the informal sector) and the trend of informality creeping into the formal sector. It also needs to see how best to introduce skills at all levels, so that people are employed meaningfully.
India has a large rural workforce working in agricultural production. The orthodox view in the 1980s and the 1990s suggested that the rural sector was second-best and that the road to development and structural change required getting people out of the rural sector and into manufacturing. We now realise that we have to shift the focus back to the rural economy and sector, and see how the rural and manufacturing sectors can both thrive and pave the way for an inclusive and robust economy. It shouldn’t be one at the expense of the other.
There is fragmentation of production and an increasing informalisation of work in manufacturing. Also, the importance of trade unions has decreased in India and the world. What kind of organisations and political forms do you see workers’ struggles taking?
Around 93% of workers in India are informally employed. But it is important to distinguish between different trends and features of informality in the economy. For example, while the share of the unorganised sector is shrinking, because Indian enterprises are getting larger, a more recent trend is increased informality in the formal sector, because of contractualisation and the casualisation of jobs. Thus, old forms of informality are being replaced by new ones.
The ILO, with India’s workers, employers’ organisations and the Ministry of Labour and Employment, has played an active role in the preparation and adoption of Recommendation 204 – Transition from the Informal to the Formal Economy. This is the first international labour standard to focus on the informal economy in its entirety and diversity and to point clearly towards a transition to the formal economy as the means for realising decent work for all and for achieving inclusive development.
It is important to promote an industrial relations system that is shaped by dialogue between the state, the workers and the employers. This is the only way to ensure social and economic stability and that democratic processes are respected.
Technology has drastically reduced transaction costs, making it easier and cheaper to share assets through websites such as AirbnBb through which private homes can be opened up to tourists as bed and breakfasts, and cab aggregators such as Uber. How would the sharing economy be regulated, and where does it leave workers’ rights?
There are swift changes affecting the world of work. We need to better understand the current transformation to respond effectively to new challenges and the sharing economy is part of these.
To this end, I created a “Future of Work” initiative seeking to broadly canvas the views of governments, workers and employers, as well as the academic world and other relevant actors. More than 130 national dialogues are currently held all over the world and a report based on their findings will be published in 2018.
We can say that for some, technological changes mean opportunity and generate optimism. For others, they bring insecurity and generate fear. Some enterprises are dispensing a directly employed workforce in part or altogether, through processes of subcontracting and outsourcing, through third-party agencies or even acting solely as an intermediary between suppliers and customers, but it’s not yet clear what the full impact of such developments on the labour market will be.
It is equally uncertain how best to regulate such employment relationships, but we must be guided by our conviction of the absolute necessity to make sure workers’ rights are protected. Without these protections, current trends towards and beyond already unacceptable levels of inequality will continue, and all will ultimately lose out. We cannot allow this to happen.
The assumptions of the last 25 years around globalisation are being questioned and political and social barriers to migration are higher than before. What challenges does a multilateral organisation like ILO face as it formulates frameworks to tackle a trend of strident, anti-immigration nationalism?
The fact is that migration tends be a highly divisive and sensitive issue. To make matters worse, public perceptions about migration flows and the almost 244 million migrants worldwide are often inaccurate.
So, firstly, it’s a challenge of awareness – an issue we aim to address by providing an accurate statistical picture of the reality of migration today to better understand the latest trends and help fight intolerance and rejection. From new ILO research we know, for instance, that there are 150 million migrant workers. The majority – 83.7 million – are men, with 66.6 million women migrant workers.
It is important to distinguish between migrants and refugees – most migration is in fact legal and takes place through established channels. However, Europe and other regions of the world have been affected by a major refugee crisis and it is clear the international community must respond.
The current wave of what you call “anti-immigration nationalism” should not let us forget that migrant workers, like all other workers, are entitled to decent work. We need to translate this principle into relevant policies. It is all the more important that migrant workers are over-represented in sectors most at risk of forced labour such as agriculture, fisheries, construction and domestic work, to name only a few. This often leads to exploitation, human trafficking and child labour.