Covid-19 impact: PM must consult with trade unions for workers’ revival package, says labour economist

Chitra Narayanan | Updated on April 09, 2020

KR Shyam Sundar, Professor, Human Resources Management at XLRI, Jamshedpur

KR Shyam Sundar offers suggestions to prevent potential unrest arising out of the escalating unemployment crisis in India

The Prime Minister should consult with representatives of trade unions and employer organisations to design solutions for workers and their families affected by Covid-19, says labour economist KR Shyam Sundar, Professor, Human Resources Management at XLRI, Jamshedpur. He has other prescriptions to prevent potential unrest arising out of the escalating unemployment crisis India is witnessing currently. Excerpts from an interaction:

The CMIE report shows a huge spike in unemployment to 23 per cent. Are we headed for even steeper increases?

I feel that the CMIE rate could well be an underestimate as their sample size was small and may not have been able to capture the status of the stranded migrant workers. It could well be in the range of 35 per cent to 40 per cent.

What are the implications? Are we going to see a period of huge unrest?

The exodus of migrant workers itself was a form of unrest, the first manifestation. Migrant workers are neither here nor there — with no livelihood security in their origin State or host State. When a crisis strikes, they look for social capital (support from kith and kin) which may be available in the origin place. They may have created social capital in the host place but the more solid ones are in the place of origin.

Most reports show that migrant workers repatriate money to origin place. So the net savings in pocket is very less.

If the lockdown continues or even if staggered lifting of lockdown takes place, the labour market works against the worker. The first ones to be sacked, and first ones to be employed, are migrant workers. This is done in order to break the regular workers’ bargaining power. This was seen in the past and is a well-known practice of employers.

To prevent potential unrest, the Central government must consider poverty-level wages in Jan Dhan accounts of all people of a minimum of ₹6,000 for a period of time.

What about the relief packages announced by States?

There is absolutely no coordination between Central and State governments. State governments have announced packages but then they go to the Centre saying, ‘our coffers are empty’. State finances are far more vulnerable as GST refunds have not taken place. So the question is: are these promises going to be delivered?

Upfront direct cash benefit through Jan Dhan is better than uncoordinated State announcements.

Three measures I would suggest are:

1) Centralised coordinated measures of providing cash benefits through Jan Dhan accounts.

2) Effectively implementing PDS. Open State borders and allow movement of vehicles.

3) Sprucing up the MNREGA scheme could soften the blow of unemployment. It should be aligned with the CPI for agri workers which, at basic levels, was at ₹300 for unskilled and over ₹400 for skilled workers. And all the arrears should be paid quickly.

Also, the relief measures for workers must be in consultation with trade unions. The government has been speaking with industry associations, but trade unions and employer organisations must be involved too, in a social dialogue. After all, India has ratified the ILO Convention C 144, which requires government to hold tripartite consultations.

Trade unions have not been consulted so far despite giving memorandum after memorandum. For the disbursement from PM-Cares fund, trade union representatives must be there. Trade unions will be able to offer credible field-based inputs for any government revival package. And their support will be crucial both at macro and micro level.

The advisories by the government to employers to not lay off workers, how far is it practical, especially as some companies are invoking force majeure?

Unless MSMEs are given relief measures, any amount of legal advisories to pay daily wages will never be honoured. Fiscal and commercial relief to MSMes should be given.

There are several things the government can do. Start a wage subsidy programme for the workers in the organised sector for a temporary period of two to three months.

Allow CSR funds of companies to be diverted to take care of employee payments. There could be suitable amendment to the Companies Act.

There are several welfare funds like Construction funds, MICA, PD — these could be utilised.

In some states, especially in Tamil Nadu, we had been witnessing clashes between migrant workers and local workers. Do you think with migrant workers going back, that issue is resolved?

Migrant workers will have to come back. The psychological scar will last only a few months. Where will they get jobs in rural areas? However, de-regionalisation of labour is a growing trend.

The problem is that, in the past, migration of workers to a sSate was considered constructive as the mosaic of society got stronger and they were benevolent influences. Today, the spread of migration has got so wide and with long-distance migration taking place they are perceived as threatening influences.

We have seen how there has been an organised method of recruiting migrant workers through contractors in order to bring down market wages. Several southern States have had to resort to unconstitutional declarations (reservation of jobs for locals) to prevent unrest.

Going forward, economic factors will begin to play a more powerful role in the issue of migration.

Published on April 08, 2020

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