Dr Bharat Jhunjhunwala
The Central Trade Unions staged a strike recently. They are seeking minimum monthly wage of Rs 10k, wage parity for contract workers; payment of pension to all organized workers; and strict implementation of the labour laws which means grating freedom to indulge in go-slows and other agitations that hit at production. These demands will provide benefits to the three crore workers in the organized sectors of the economy but mean little for the 50 crore workers in the unorganized sectors.
This sad situation of one section of workers exploiting another section of their own has its roots in the Trade Union movement that started in the UK more than 150 years ago. Conditions of the workers were harsh then. Children of seven to twelve years were made to work on looms for 12 hours a day. They were whipped if they slowed down. They were not given time to eat lunch. They were told to eat with one hand and work with the other. The Factories- and Trade Union Acts were legislated to ameliorate the work conditions in this circumstance. Undoubtedly they helped.
The relief got by the UK workers, however, became a curse for the workers in British colonies like India. The implementation of these Acts led to increase in cost of production and would have led to British goods being priced out of the world markets. This did not happen though because huge amounts of monies were being received by Britain from the colonies in form of unilateral taxes-or loot. Part of this loot was used to provide facilities to British workers. A labour aristocracy consisting of British workers was established. The poverty of Indian workers; and improved conditions of the British workers were two sides of the same coin. This fact was recognized by no other than Frederich Engels, longtime colleague of Karl Marx. A year before his death in 1883, Engels wrote to Kautsky: “You ask me what the English workers think about colonial policy. Well exactly the same as they think about politics in general: the same as the bourgeois think. There is no workers’ party here, you see, there are only Conservatives and Liberal-Radicals, and the workers gaily share the feast of England’s monopoly of the world markets and the colonies.” Effectively this means that the British businessmen and workers had forged an alliance and were jointly exploiting workers in rest of the world.
Main issue is that of distribution of surplus between the businessmen and workers. The businessman wants to get the larger share. To this end the forges an alliance with a small section of workers so as to deprive the larger numbers. These labour aristocrats pose as if they represent the interests of all workers while actually they are peddling their own self interests to the detriment of the rest.
The demands raised by the Central Trade Unions in the recent strike have to be understood in this backdrop. The demands will lead to an increase in the cost of labour. The price of labour will rise while that of capital will remain unchanged leading to labour becoming more expensive relative to capital. That will encourage the industrialists to substitute capital for labour. A UP-based sugar factory was manufacturing 2000 bags of sugar a day and employing 2000 workers in the seventies. Today the same factory manufactures 5000 bags of sugar but employs only 500 workers. Many operations such as unloading sugar cane from trucks, feeding bagasse into the boilers, cleaning sugar in centrifugals and stitching bags have been automated. The 500 workers are getting better wages but thousands have been deprived of jobs that could have been created.
This job destruction has taken place on the scale of industry as well. A long and successful labour strike was led by Datta Samant in the seventies against textile mills of Mumbai. Result was that textile mills have mostly migrated to Surat. Numbers of workers employed in Mumbai in this sector has become near zero. The Left Front Government of West Bengal provided encouragement to gherao in the eighties and nineties. Result was a virtual deindustrialization of the state. The Left Front Government of Kerala encouraged militant trade unionism among farm workers. Result has been that farmers have moved away from labour intensive crops like paddy and banana and started cultivation of labour extensive crops like rubber and coffee. Laloo Prasad encourages goondaism in Bihar. Result was huge migration from Bihar. These are logical results of increase in cost of labour. Acceptance of the present demands by the Trade Unions will lead to a similar result. It is like killing the hen that lays the golden egg.
The country is restive today because largest numbers of our people are pushed into low wage jobs in the unorganized sectors. The number of workers in the organized sectors has increased by mere 20 lacs in the last two decades. The total number of workers has increased by about 20 crores in this same period. This means that only one out of hundred new entrants has got job in the organized sector; and that a huge army of unemployed or underemployed is in the making. Note also that the average emoluments of an employee of the Central Public Sector Undertaking were Rs 55k per month in 2011. They want an increase in this when their unorganized counterpart is barely able to obtain Rs 5k per month.
My objective is not to support the businessmen in paying fewer wages to their workers. My objective is to bring to the attention of the reader that the businessmen are using a divide and rule policy to pay less to the workers on the average. Need is to first put in place policies that lead to higher wages for the 50 crore ordinary workers in the unorganized sectors. Policies that make it profitable for the businessmen to employ larger number of workers should be made. Taxes may be imposed on job-eating machineries like excavators and harvesters; employment subsidy should be provided to businesses instead of paying unemployment compensation under MNREGA; industries employing large number of workers should be exempted from labour laws and also provided tax reliefs; and Government contractors should be required to undertake works by manual labour instead of machines. We should know that appeasing the labour aristocracy will impose burden on the crores of our ordinary people, fuel social unrest and the country will not be stable. The task is to encourage businesses to reinvest their profits in labour intensive production methods. The Trade Unions need to reinvent themselves. They must recognize that their ranks have joined the upper classes in exploiting the unorganized labour. They need to take up the cudgels on behalf of the unorganized before they further peddle the interests of the organized workers.
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