The Finance Minister in her maiden Union Budget speech did not make any mention of the “jobs crisis” in the labour market and even the Economic Survey (ES) 2019 did not make a detailed analysis of the huge data contained in the Periodic Labour Force Survey (PLFS), 2017-18.
On the contrary, the ES argued that the so-called Rajasthan model of labour law reforms can create jobs. In the official discourses on jobs, the emphasis is more on numbers than on the “quality of jobs”. We demonstrate using the PLFS data to argue that the quality of jobs has been deteriorating over the years.
According to the PLFS, 71.1 per cent employees in 2017-18 in regular wage/salaried employment (not necessarily same as the permanent/open-ended employment) did not have a written job contract in the usual status (principal and subsidiary statuses, US/PS+SS) in the non-agricultural sector.
Even though the government cautions that the PLFS figures are not comparable with the statistics provided by the National Sample Surveys (NSS) of years prior to this, the data from both the sources are not likely to diverge so much to render comparisons invalid.
The proportion of regular employees without formal job contract increased during 2004-05 to 2017-18 for both males, from 58.9 per cent to 72.4 per cent (13.5 percentage point hike) and females, from 59.6 per cent to 66.8 per cent (7.2 percentage point increase) and for all persons from 59.1 per cent to 71.1 per cent.
The fundamental document of employment is a written (formal) employment/job contract which confers a legal status to the employees and associates them with the firm in which they are employed and provides a basis for claiming legal benefits as per law.
This then constitutes a “fundamental labour market precarity” as these employees are “faceless” ones who cannot lay claim to any benefit as their immediate task will be to establish that there exists an employment relationship and this is virtually an impossible struggle.
In China, the Labour Contract Law 2008 requires the employers to provide a formal contract and shall include the specified aspects of the contract, including wages.
If the employer fails to conclude a written contract within one year of employment of a worker, then the latter will be deemed to have been appointed in an open-ended contract; further if the employers do not specify wages then either the wages in the collective contract or the principle of equal pay for equal work will be implemented for determining wages.
Here, none of the existing labour laws requires an employer to serve a formal job contract to an employee and the proposed Labour Code on Occupational Safety and Working Conditions provide for the same, but it does not carry the penal corrective clauses existent in China.
Outside the ambit of law
Further, a little more than a half of the regular wage/salaried employees were not eligible for paid leave in the non-agriculture sector, which means either these are out of coverage of laws like the Factories Act, 1948, the Shops and Establishments Act (a regional law) and the Maternity Benefit Act, 1971, or they are denied even if eligible — given that factory employment constitutes a small share of total employment, the latter explanation is feasible.
It is surprising that leave deprivation is gender neutral in the sense that the shares of male and female workers denied paid leave are almost same which also questions the effective and widespread implementation of the Maternity Benefit Act.
Finally, taking 48 hours a week as the optimal and legal working hours of workers, we find that in the regular wage and salary employment category male workers worked 12 hours and female workers 4.7 hours more than the stipulated working hours.
Not surprisingly, the self-employed are found to be working for longer hours (work intensity) than the wage earners, which goes to prove that they self-exploit themselves to earn more.
This is again proven by the fact that on an average a self-employed person in urban areas in a quarter (July-September) during 2017-18 earned less than a regular wage earner and the difference becomes larger in the case of females and males in urban areas.
People are not only excluded from the labour market, even if they do get a job it’s likely to be precarious.
The writers are with XLRI Jamshedpur and National Law University, Mumbai, respectively