The Central Trade Unions staged a strike recently. They are seeking a minimum monthly wage of Rs 10k, wage parity for contract workers; payment of pension to all organised workers; and strict implementation of labour laws, which means granting 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 organised sectors of the economy, but mean little for the 50 crore workers in the unorganised sectors.
This sad situation of one section of workers exploiting another section of its own has its roots in the trade union movement that started in the UK more than 150 years ago. Working conditions were very 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 these circumstances. Undoubtedly they helped.
The relief enjoyed by the UK workers, however, became a curse for the workers in British colonies like India. The implementation of these Acts led to an increase in the 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 recognised 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 the rest of the world.
The main issue is that when it comes to distribution of the surplus between the businessmen and workers, the businessman wants the larger share. To this end, he forges an alliance with a small section of workers, so as to deprive the larger numbers. These labour aristocrats pose as though they represent the interests of all workers, but in actuality, they are putting their own self-interests ahead 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 2,000 bags of sugar a day and employing 2,000 workers in the seventies. Today, the same factory manufactures 5,000 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 the 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 in other manufacturing sectors as well. A long and successful labour strike was led by Datta Samant in the seventies, against the textile mills of Mumbai. The result was that textile mills mostly migrated to Surat. The numbers of workers employed in Mumbai in this sector is nearly down to zero.
The Left Front government of West Bengal provided encouragement to ‘gherao’ in the eighties and nineties. The result was a virtual de-industrialisation of the state. The Left Front government of Kerala encouraged militant trade unionism among farm workers. The result has been that farmers have moved away from labour intensive crops like paddy and banana and have started cultivation of labour-extensive crops like rubber and coffee.
Lalu Prasad Yadav has encouraged ‘goondaism’ in Bihar. The result has been a huge migration from Bihar. These are logical results of increase in cost of labour. The acceptance of the present demands of 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 the largest number of our people have been pushed into low wage jobs in the unorganised sectors. The number of workers in the organised sectors has increased by a mere 20 lakh 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 every hundred new entrants has a job in the organised sector; and that a huge army of unemployed or underemployed is in the making. Note also that the average emoluments of a central public sector undertaking employee were Rs 55k per month in 2011. They want an increase in this, when their unorganised 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 workers on the average.
The urgent need is to first put in place policies that lead to higher wages for the 50 crore ordinary workers in the unorganised sectors.
Policies that make it profitable for businesses to employ larger number of workers should be formulated. Taxes may be imposed on job-devouring machinery like excavators and harvesters; employment subsidies should be provided to businesses, instead of paying unemployment compensation under MNREGA; industries employing large numbers of workers should be exempt from labour laws and also provided tax relief; and government contractors should be required to undertake work using manual labour, instead of machines.
We should realise that appeasing the labour aristocracy will impose a 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 recognise that their ranks have joined the upper classes in exploiting unorganised labour. They need to take up cudgels on behalf of the unorganised before they further peddle the interests of the organised workers.