Column : Re-imagining trade unions

Feb 22 2013, 04:34 IST
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SummaryMindless strikes accelerate trade unions’ decline. They should focus on skills, formal employment, benefits & job creation.

The lukewarm response to the trade union-called general strike of the last two days will be remembered as a turning point. It will either mark the point when this institution—vital to society—refused to believe that India has changed and that will accelerate its decline into irrelevance. Or it will mark the point when trade unions recognised that the future of India’s labour market is different from the past. India is young—65% of our population is less than 35 years old. The world of work is different—the lifetime mai baap employment contract has morphed to a taxicab relationship. Nobody can predict the jobs of the future—employability and skills are more important than employment. Laws cannot guarantee employment—competitive markets mean that shareholders don’t pay salaries but customers do. The narrative of job creation pivoting around big companies is a myth—100% of net job creation in India over the last 20 years has happened in companies with less than 20 employees. Technology changes are ensuring that manufacturing job creation is about much more than unit labour costs—only 4% of the value of an iPod forms assembly costs to China. Our huge self-employment—50% of the labour force—does not signal an overweight entrepreneurial gene but that there are not enough jobs for the poor; they cannot afford to be unemployed so they are self-employed.

Trade unions are a very important institution for society if they escape their current domination by a minority who position their narrow self-interest as national interest. They must represent and take up issues that matter to all labour and realise that job preservation is not a form of job creation. I’d like to make the case that a democracy like India could benefit greatly from vibrant trade unions that focus on four issues:

Skill development: More than 58% of India’s youth suffer some degree of skill deprivation. Only 1 in 26 kids that start school finish it. We are realising that nobody can teach a child something in 6 months that they should have learnt in 15 years. As many as 120 lakh and 60 lakh kids fail class 10 and 12 every year, respectively. And most discourse on skills focuses on new entrants—the 10 lakh kids who will join the labour force every month for 20 years—but we also need to think about the 400 million already in the labour force who need to be re-skilled to move to new professions. Trade

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