THE LABOUR MARKET OF THE FUTURE

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THE LABOUR MARKET OF THE FUTURE POLICY
CHALLENGES FOR SOCIAL SECURITY PRESENTED BY
B.K. SAHU, ADDL. COMMISSIONER, EMPLOYEES' STATE
INSURANCE CORPORATION, MINISTRY OF LABOUR,
GOVT. OF INDIA, NEW DELHI TELE FAX 91 (33)
2225 9236 E-Mail join5279_at_dataone.in/bk_sahu04_at_y
ahoo.com Visit Us http//www.esic.nic.in /
http//www.westbengal.org
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PREFACE With Globalization, the economies of
the countries are flattening resulting in huge
shifting of Labour within the countries and among
the countries. There is shift of Labour force
from traditional, formal sectors to privatization
and informal sector with emphasize on service
sector. All these are resulting in requirement
of Social Security protection which in
traditional sense is limited in the present
context. This is the challenge for which we have
to gear up the social protection towards
universal health and cash benefit provisions for
which sources of Revenue for funding,
Public-Private partnership and Quality of
Education have to be augmented. The support of
all stakeholders of the scheme with Government as
a regulator have all to play a significant role.
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(I). INTRODUCTORY   Respected international
delegates and the organizers of the 5th
International Research Conference on Social
Security here in Warsaw. It's my proud privilege
to represent my organization, and my country and
to present my paper to this august gathering. I
take this opportunity of presenting a paper on
the Labour Market of the Future Policy
Challenges for the Social Security, particularly
in the background of my great country, India.
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In today's world, in the fast changing scenario
among all the countries in the third world, my
country, India, by the side of the neighboring
China, is emerging as one of the major labour
market in the visible future. As for my country
is concerned India's foray into the global market
basically sustains on four masts- employments of
labour and enterprise creation, rights at work,
basic social protection for all the workmen, and
dialogue among all stakeholders, i.e. government,
employers and workers in the future.
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While talking about the future, I look to the
year 2047, the centenary year of the great Indian
independence, and when India will quite
reasonably be the third biggest super power in
the technological front. At that time, the Indian
society will have the maturity to have a great
extent and my government will be constitutionally
duty bound to provide a broad spectrum of social
security to one and all in my country. And hence,
it will no more be called a third world country
nurturing a large labour market only. This will
happen after our country ensures a massive social
security cover for one of the largest workforce
on the surface of the earth.
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(II). PECULARITIES OF LABOUR MARKET IN THE
L.P.G. ERA   India, beside China, is a massive
workmen's territory with a billion plus
population. The problems of under-development,
poverty, inadequate employment, extremist
violence, natural disaster, corruption at
different levels in the society, and lack of
social security to the underprivileged section in
the society, all have to be frontally tackled and
confronted with. Managing all these social
problems of enormous proportion affecting the
labour market has become trickier because of
the
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fact that today the world society is passing
through a plethora of both structural and
technological changes. Such changes are
ultimately going to affect the labour force in
different countries. This is a scenario where the
productive power of labor and the order according
to which security has to be provided in the
society need to be managed and distributed among
the various ranks of the working populace. The
massive labour force in India, today, happens
to be the next to China, and such a
gigantic labour potential instead of being
used and utilized straightway in the market
driven economy, is
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made to tussle with the concepts of outsourcing.
It is rather ironic that when labour has remained
in great demand to move the world, such labour is
altogether outsourced for generation of wealth.
In fact, huge outsourcing of labour has generated
a phenomenon called casualisation in the job
market. For India, as the case with any other
underdeveloped country, the net result has
remained that labour itself has become unsecured,
and the power of labour is not utilized to it's
fullest potential. The disturbing trend is that
the per capita productivity in the manufacturing
sector is tapering
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very fast due to the fall in the use of the
labour. This is for the simple reason that
neither our economy nor the society has given
adequate importance to the power of labour and
its importance to the development of the society.
In the Indian scenario with more than 2 billion
hands, the importance of labour has not been duly
recognized by the society that has not bothered
to provide security to these hands. In other
words, the society, more appropriately the civil
society, has become a commercial place where the
terms and condition in the labour market
provided by the human being are being
measured in commercial terms,
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between the buyer and the seller. The net
casualty is both the society, and the social
security. Another offshoot of this disaster is
the youth labour, the citadel of the future
productivity of India. Their growth is charted
as under for whom the need for social security is
also rising.  
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(Source Unemployment among Indian Youth in
India, Employment and Training Papers 36,
Institution of Economic Growth, New Delhi)
YEAR FIGURES IN MILLIONS
1991 85
1997 93
2002 105
2007 117
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• The role of the Beijing declaration is
  praiseworthy in this context. The declaration
  addresses point blank some major issues
• The majority of the working populations in the
  world do not have any form of social security
  whatever security was available some years ago
  has declined
• Public discussion is more on the cost involved
  ignoring the spirit of social security
• Demographic ageing is treated as a challenge to
  social security protection
• Financial sustainability of benefit schemes puts
  a question mark on the level of protection
• All these above factors when combined leave a
  feeling of confusion and lack of public
  confidence in the viability of the social
  security of the scheme

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Now coming to the concept of privatization, in
this highly competitive market the world is the
market at large and all the trade barriers have
been liberalized, there is nothing at bargain
except the cost of labour. Most of the third
world countries have traditionally remained
agriculture based and the agriculture being the
backbone of the Indian economy has remained a
labour intensive one. Under different
constraints, the importance of labour was
compromised for which the per capita productivity
in the agricultural sector has showed a trend of
decline. Added to this, the property owners love
to reap where they never sow and demand a rent
even for his natural produce. Against such
primitive economic infrastructure sudden influx
of technologies and assimilation of trade
barriers have been so staggering that
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the labour succumbs as the first casualty in the
face of these individual greed, and also the
multi national companies that are making
major thrust into the labour contributing to the
agricultural sector and management of the same.
Since the cost of the land for use in
agricultural and manufacturing, activities are
constantly accelerating in essence, the spread
of privatization is trying to squeeze into labour
components. The different guises under which
labour continues to be expedited are as under
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(Source all from ILO Governing body 276th
Report on Globalization, Geneva, November, 1999)
Sl.No. Nature of Engaging Labour Average share of total engagement in labour in percentage Average share of total engagement in labour in percentage Average share of total engagement in labour in percentage
Mid 1980s Around 1990 1997 and after
 1 Part time 17.59 18.60 20.85
2 Temporary 13.80 11.76 13.12
3 Salaried but unprotected - 32.35 38.38
Consequently, the outsourcing agencies under the
guise of privatization devour the profit in
proportionate to the capital out of the total
value added to the material by the labour. This
is the sad part of the story where privatization
has exploited grounds of liberalization in the
age of globalization, and the victim has been the
labour market.
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(III). ADEQUACY (?) OF THE PRESENT SOCIAL
SECURITY SYSTEM TO MEET THE PRESENT DAY
CHALLENGES
During the last half a century, social security
in India has evolved in a very limited sphere
headed by a very few legislations. Some of which
are rarely seen on the ground. To name a few,
Minimum Wages Act, 1948, Maternity Act, 1961,
Workmen Compensation Act, 1968. These
legislations have largely remained on paper. The
only two legislations that have catered only to
less than 10 of the working population in the
organized sector in independent India are the
Employees' Provident Fund Act, 1951 and the
Employees' State Insurance Act, 1948. For the
last 50 years, the social security provided by
these two enactments has remained by and large
confined to urban
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and semi-urban areas. They have not yet been made
any dent beyond that. The quagmire of the poverty
has remained staggering in the face of the
working population, and consequently the society
in the Indian sub-continent that has failed to
provide day-to-day food security to the teeming
million, and also to provide the cover of social
security to the working people at large. Another
reason for such failure has been violation of the
labour laws that has never been stringently dealt
with. The soft approach of imposing a penalty of
some thousand rupees, which is also in rarest of
the rare cases, has never seen any employer
arrested for violating labour laws. On the
contrary, the workers who deserve a sensitive
social security system are penalized by the
employers for demanding their legal rights. In a
poverty stricken society, there is none to
provide the social security to them except
themselves.
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We may take a very recent case from my
neighbouring country Bangladesh. The war against
poverty waged by the Nobel peace laureate 2006,
and micro-economist Md. Yunus and his Gramin Bank
is a brilliant example of social security. In my
personal view, I would say that only when the
country and the society does not respond to the
security needs of the working class, the members
of the society step in under compulsion. And this
lack of responsiveness to the emergent needs of
the present day working class that has eaten away
the concept of social security. The system has
remained very inadequate, in my opinion.
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(IV). POSITION IN INDIA   As regards the term of
Globalization, the same is defined as a process
of rapid economic integration among the countries
by the process of liberalization of the trade,
investment of capital flow and rapid
technological change. We in India understand that
globalization involves enterprises and workers of
nearly all countries, in goods as well as in
service sector. Since the complex process of
liberalization, privatization, and globalization
is a multifaceted one, it is not possible to
identify a simple relationship in LPG and social
progress that includes social security. In a
country like India, the tax system is becoming
less distributive. The peculiar trend is that in
the LPG era where it is not only a cheap labour
that is threatened to its extinction but the high
income enterprises are also not out of danger.
Today, the society that has become so ruthless
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that it threatens job insecurity of a worker in
India, as well as the social security that is
available, may be limited to a certain extent.
Therefore, on the threshold of the globalization
in the Indian economy the labour market has
become more vulnerable to the international
shocks when the society of India has not been
able to accept the change. Moreover, the inflow
of capital that sustains the economy as well as
procures the labour has also become more
volatile. Consequently, an unpredictable social
economy falls short of expectation in the field
of social security particularly in the Indian
scenario. The onslaught of globalization is
viewed as a challenge to the Indian economy,
where the concepts of labour reforms and social
security are placed down the ladder. At the end
of the day, the labour is at the receiving end
that faces the hardship.
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Broadly speaking as on date the working
population in various sectors in India is
projected as under (in millions) (a)   Total
workforce- 400 (b)  In organized sector-
40 (c)  In unorganized sector-360 This shows
that only 10 of the working population is
available under the social security cover, while
the majority is the deprived lot. Indian labour
is confronted with another concern the concern
of migration. As we have seen that after the
Second World War, the enormous migration of
labour in the Americas, in the continents, and
from the main land of China into Hong Kong.
Today, in the present dispensation, Indian
labour force is confronted with the
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similar situation. They bear the same
characteristic of migrated workers from rural to
urban set-up. It is the tragedies of the Indian
labour that the skilled labourers in India based
in rural areas have no employment opportunities.
Under agonizing pain they move to the urban and
semi urban areas where the value of the
productive labour has already been started
declining (Table in the next slide). The elder
populations are fading and the graying labours in
the rural sector find no rural outlets. The net
result is that they have become liability to the
society than an experienced asset. Moreover, when
labour is not utilized to the optimum extent,
sedentary lifestyles eat away their productivity.
This is also fallout of the LPG era. A careful
study of the following facts reveals how the
ingredient of labour has fallen far behind the
optimum level, both in resurging rural and
burgeoning urban scenario.
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India Distribution of Youth Labour in Rural
and Urban areas Declining Absorption of Labour
Usual Activity Year Male Male Male Female Female Female Persons Persons Persons
Usual Activity Year 15-19 20-24 15-24 15-19 20-24 15-24 15-19 20-24 15-24
RURAL LABOUR RURAL LABOUR RURAL LABOUR RURAL LABOUR RURAL LABOUR RURAL LABOUR RURAL LABOUR RURAL LABOUR RURAL LABOUR RURAL LABOUR RURAL LABOUR
Labour Force 1987-88 62.9 91.8 75.8 41.5 48.4 45.0 53.0 68.8 60.5
Labour Force 1993-94 59.7 90.2 73.2 37.1 46.9 42.0 49.5 67.9 58.2
URBAN LABOUR
Labour Force 1987-88 42.9 79.2 60.3 16.9 22.5 19.6 30.8 51.8 41.1
Labour Force 1993-94 40.4 77.1 57.4 14.1 23.0 18.5 28.4 51.0 39.1
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So far India is concerned, globalization is also
a process of opening of a quality labour, capital
and service market to the world economy and
trade. Notwithstanding the fact that this
process of globalization has aided the
transformation of the South Asian economies
including India, it has aroused fear and
suspicion perpetuating inequality, poverty in
some segments of the society and contributing
immensely to weakness of the Indian economy to
defend it from the external shocks. In short,
globalization is already showing a backlash of
economic growth, and social deprivation. This has
happened because of the fact that labour has been
placed in the back burner, and the society has
not been able to secure it.
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• (V). FUTURE STRATEGY TO MEET THE CHALLENGES
•  
• In the Indian scenario, the challenges are
  Himalayan. This is proposed to be tackled by a
  four-pronged strategy
• In India during the last half a century, the
  concept and definition of social security has
  largely remained confined to the arena of
  provident fund, and employees' state insurance
  schemes only. Conversely speaking, the service
  that has remained limited to the extent of
  medical benefit, cash benefit under ESI, and
  pensioners' benefits under the EPF scheme for the
  half a century has constricted the meaning of
  social security and the concept has remained
  stagnant. It is time that the dynamics of social
  security is widened that will cover the security
  and insurance into the frontiers of health,
  labour, and employment. It is rather encouraging
  that the institution

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of social security has tried to stand on
its own feet since independence without any
financial support even from the Government in our
country, and not even a single arm of the society
has supported the endeavours of the system called
social security. There is very urgent need to
raise the awareness in the society that the root
of productivity in the society is labour and to
keep the labour in good stead, there is need for
a healthy work force. Therefore, only an
integrated health and labour will be one frontier
of strategy that will spread side by side the
extensions of coverage of the workmen, both
horizontally and vertically.  
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• As far as the requirement of education is
  concerned, there is need for universalization of
  education for all and specialization in education
  for the workforce that will contribute its power
  to the specialized job market. It has been
  observed through study that the youth of the
  country caters to the 70 of the productivity and
  rest 30 is the productivity generated by the mid
  and the upper middle level of labour force. Also
  there is need for involving one and all
  stakeholders in the society- the workforce, trade
  unions, policy makers, and employers into the
  crusade against lack of education among the
  workforce.
•  

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• And the last but not the least is the requirement
  for reversing trend by virtue of which labour and
  social security would be assigned their due
  place. That is raising the social awareness to
  keep labour at the top of the priority at par
  with capital. It is time to realize that a labour
  is also a capital. Once labour is assured of its
  pride of place, social productivity will
  consequently increase. Therefore, the society
  should build up the strategy for social security
  to cover health, education and optimal employment
  to the labour force so that the challenges in the
  era of LPG can be met. What we require to address
  squarely is expanding and strengthening the
  service delivery structure of social security,
  particularly the medical benefits.
• Funding a social security scheme that is both
  economical and efficient in services.

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(VI). CONCLUSION   For India, in the era of LPG,
both industry and agriculture are at cross road.
Though, India is a food surplus country and has
over 45 million tons of wheat and rice in its
godown, over 250 million children, women and men
go to bed hungry every day. From the only food
secured to become livelihood secured, India needs
to overcome the biggest challenge of social
security in the country. Only a sustained effort
of placing labour under a sound social security
can ensure it.
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SUMMARY 1. India is one of the biggest emerging
labour market of the future that will be
requiring a massive social security over. 2. The
potential of Indian Labour is growing despite the
scenario having been under attack by the market
forces. 3. The importance of Beijing Declaration
is most relevant for Indias Labour market. 4. In
a highly competitive Indian market the labour has
been marginalized in the form of part time,
temporary and unprotected, thus deprived of
social security. 5. Indian system of Social
Security has remained very limited uptill now,
only upto 10 in the organized sector.
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• 6. The success story of the Bangladesh Gramin
  Bank is a case of Social Security of poor
  labourers.
• 7. Indian Labour is also becoming migratory in
  nature with the changing scenario.
• 8. Labour in India and the social security they
  require has been kept in the low priority area.
• 9. Universalisation of Education is sure to add
  to the generation of quality labour in India.
• Indian labour is in need of a livelihood security
  instead of just a food security.

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Recently, Mr. Lech Walesa, front runner of the
Solidarity Movement in Poland was in India. When
he was asked, Is there anything he feels he has
still not achieved, reply which he gave aptly
describes the present Social Security system
vis-à-vis flexible labour market. I quote
  Quite a lot. Globalisation has still not
take over completely. Solidarity among countries
and individuals is rare. Economic disparities
are widespread, struggle for space is getting
bitter. While I think I havent achieved much,
there is lots left for you to do.
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A customer is the most important visitor on our
premises. He is not dependent on us. We are
dependent on him. he is not an interruption on
our work. He is the purpose of it. He is not an
outsider on our business. He is a part of it. We
are not doing him a favour by serving him. he is
doing us a favour by giving us an opportunity to
do so . Mahatma Gandhi
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WE MARCH TOGETHER TO HAVE A SATISFIED MAN POWER
BY PROVIDING Efficient Services to Insured
Persons - THANK YOU - B.K. SAHU, ADDL.
COMMISSIONER, EMPLOYEES' STATE INSURANCE
CORPORATION, MINISTRY OF LABOUR, GOVT. OF
INDIA, NEW DELHI