{"id":128266,"date":"2020-05-17T22:25:59","date_gmt":"2020-05-17T16:55:59","guid":{"rendered":"https:\/\/thepubliceconomist.com\/?p=128266"},"modified":"2020-05-17T22:26:01","modified_gmt":"2020-05-17T16:56:01","slug":"crises-and-the-workers-at-the-margin","status":"publish","type":"post","link":"https:\/\/thepubliceconomist.com\/?p=128266","title":{"rendered":"Crises and the Workers at the Margin"},"content":{"rendered":"\n<p>Informal\nsector functions as the backbone of the Indian economy. It constitutes around\n60% of the economy and employs around 80% of the workforce of the country. If\nwe add the informal laborers in the organized sectors in the form of\ncasual\/contract laborers, the figure will go up to 90%. The vulnerable living\nconditions of the informal sector workers, <a href=\"https:\/\/www.wiego.org\/sites\/default\/files\/publications\/files\/Horn_GEC_Study_2009.pdf\">without any safety nets to fall on<\/a>, are unacceptable in an equitable democratic society. &nbsp;The current episode of COVID-19 has once again\nrevealed the perilous nature of the informal sector. The measures taken to\ncontain the disease, social distancing, and lockdown, have brought all economic\nactivities to a standstill, and we\u2019re forced to choose between lives and\nlivelihoods. This has serious effects on the economy and livelihoods of almost\nall sorts of people. But, as Adam Smith pointed out in his famous The Wealth of\nNations, \u201cthe workman may be as necessary to his master as his master is to\nhim; but the necessity is not so immediate\u201d.<\/p>\n\n\n\n<p>Once\neconomic activities are stopped, and there is no income coming in, the workers\ndo not have any means of subsistence. &nbsp;The evidence and <a href=\"https:\/\/ruralindiaonline.org\/articles\/covering-the-human-cost-of-covid-19\/\">stories<\/a>\nabout the humanitarian crisis coming from various parts of the country are dire\nAccording to <a href=\"https:\/\/covid19socialsecurity.files.wordpress.com\/2020\/05\/32-days-and-counting_swan.pdf\">the report of Stranded Workers Action Network (SWAN)<\/a>, a group of volunteers conducting relief works for the stranded\nworkers across the country, 72% of the workers who have contacted them have\nfood ration left for only two days. Though the central government and state\ngovernments have announced various relief packages for the poor and vulnerable,\n97% of the workers did not receive any cash relief.<a href=\"#_ftn1\">[1]<\/a> We\nhave also seen the terrible massive exodus of migrant workers from the big\ncities. <\/p>\n\n\n\n<p>The\nsame is the fate with the small businesses in the country in which a\nsubstantial portion of the population &nbsp;are &nbsp;self-employed\nand have shut down putting their few employees also at risk. The real output loss\naffects businesses irrespective of their size, but big business can traverse\nthrough this crisis with their cash stock. After the <a href=\"https:\/\/www.youtube.com\/watch?v=Up1Q7e2y_v0\">double\nblow of demonetization and the implementation of GST<\/a>, the current crisis has hit the small businesses hard and they are\nforced to exit the market. Also, to make the situation worse, the <a href=\"https:\/\/www.law.ox.ac.uk\/business-law-blog\/blog\/2019\/07\/gig-economy-calls-identification-within-indian-labour-laws\">gig workers<\/a>,\nare not even considered as employees under the Indian laws and are therefore\nunable to avail of any form of employee benefits. <\/p>\n\n\n\n<p>The\nrelief measures by governments like food rations and temporary shelters would\nhelp the informal workers to navigate through this crisis in the short-term.\nHowever, in the long-run, considerable deliberations should be made on the\nsocial security schemes of the government, <a href=\"https:\/\/www.ilo.org\/wcmsp5\/groups\/public\/---ed_norm\/---relconf\/---reloff\/documents\/meetingdocument\/wcms_080105.pdf\">which ensures a life with dignity for these workers<\/a>. The existing frameworks have to be carefully reviewed, and\nredesigned if needed, to ensure stable livelihood for the poor and\nmarginalized.<\/p>\n\n\n\n<p>India\nhad adopted <a href=\"https:\/\/www.ilo.org\/wcmsp5\/groups\/public\/---ed_emp\/---emp_policy\/documents\/meetingdocument\/wcms_125979.pdf\">two major initiatives<\/a> in the early 2000s to deal with the plight of the working masses\nin the unorganized sector. The first, Mahatma Gandhi National Rural Employment\nGuarantee Act (MGNREGA, 2005) and the second, Unorganized Workers&#8217; Social\nSecurity Act (UWSSA, 2008). NREG program was envisioned as to provide\nadditional guaranteed work to the underemployed workers in rural India and it\nwas rolled out massively, thus becoming the flagship program of the then\ngovernment. NREG program continued to be the major welfare program of the\nGovernment of India with the highest budgetary expenses among other social\nschemes. Like in the past rural distresses, in the current situation too, NREG\nis considered to be a tried-and-tested program.<\/p>\n\n\n\n<p>On\nthe other hand, UWSSA was not implemented well and still <a href=\"https:\/\/economictimes.indiatimes.com\/news\/economy\/policy\/government-readies-social-security-scheme-for-50-crore-workers\/articleshow\/63130835.cms?from=mdr\">plans<\/a> on\nits comprehensive execution are just in progress. UWSSA came into being considering\nthe recommendations of <a href=\"http:\/\/dcmsme.gov.in\/NCEUS.html\">National\nCommission for Enterprises in Unorganized Sector<\/a> (NCEUS). The social security benefits to meet any uncertain events\nwere only available to workers in the formal sector. The NCEUS report proposed\na scheme for a universal social security cover for all workers. UWSSA did not\nlive up to the recommendations of NCEUS and could only be considered as a\nwatered-down version of those recommendations. Whatever has been done in this\nregard through various social security schemes was unsatisfactory. For\ninstance, the NCEUS recommended a system where the benefits claimed could be\nportable and thus take care of migrant needs.<a href=\"#_ftn2\">[2]<\/a> Such\na system would have be immensely useful in the current situation, where the\nstate and the public authorities were totally confused and helpless while dealing\nwith the stranded migrant workers. If we had implemented a proper social\nsecurity scheme for the informal workers, we could have easily dealt with the\nissues with which we are grappling now by facilitating identification, and\ndelivery mechanism for marginal workers.<\/p>\n\n\n\n<p>In\nthe last couple of years, there were some clamor around the <a href=\"https:\/\/www.telegraphindia.com\/opinion\/dangerous-withdrawal-against-the-scrapping-of-employment-guarantee\/cid\/1600334\">weakening of MGNREGA<\/a>, the present crisis has shown that, if anything, we need more of\nsuch social security programs. The current pandemic has exposed the importance\nof having an appropriate social security mechanism and the holes in the\nexisting system. It is high time to make structural changes in the social\nsecurity system of the country. The NREG program has to be directed to address\nthe structural issues in the rural economies to reap maximum benefit from it. Moreover,\nproper and reliable social security benefits are to be extended for the\ninformal workers, including the gig workers.<br><\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><a href=\"#_ftnref1\">[1]<\/a> The SWAN report is not based on a random sample survey, it collects\ninformation from the workers who call them for relief. Hence, the estimates\nwill have serious selection bias. So far 16863 workers have contacted them.<\/p>\n\n\n\n<p><a href=\"#_ftnref2\">[2]<\/a> Refer Ravi Srivastava. (2012). Social Protection For Workers In\nIndia: Struggling For Basic Rights Under Increasing Labour Market Flexibility.\nIndian Journal of Labour Economics, 55(2) and Ravi Srivastava. (2020). Vulnerable\nInternal Migrants in India and Portability of Social Security and Entitlements.\nWP 02\/2020, Centre for Employment Studies Working Paper Series, Institute for\nHuman Development.<\/p>\n","protected":false},"excerpt":{"rendered":"<p> The evidence and stories about the humanitarian crisis coming from various parts of the country are dire According to the report of Stranded Workers Action Network (SWAN), a group of volunteers conducting relief works for the stranded workers across the country, 72% of the workers who have contacted them have food ration left for only two days.<\/p>\n","protected":false},"author":66,"featured_media":128267,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[3,92],"tags":[285,302],"class_list":["post-128266","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-indian-economy","category-social","tag-covid-19","tag-labour-issues-during-lockdown"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - 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