Strike Against New Labour Laws: Labour unions or labour aristocracy?

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November 27, 2020 5:20 AM

Trade unions can’t do much good if their membership is confined, as it is today, to a fraction of the working class

To that extent, the unions should have welcomed the changes in the labour laws since, if the state governments follow the Centre’s lead—less than a tenth of the country’s labour laws pertain to the central government—this can lead to a sharp increase in manufacturing once the current Covid-induced crash sorts itself out.To that extent, the unions should have welcomed the changes in the labour laws since, if the state governments follow the Centre’s lead—less than a tenth of the country’s labour laws pertain to the central government—this can lead to a sharp increase in manufacturing once the current Covid-induced crash sorts itself out.

Given the small fraction of the country’s workforce that they represent, it is hardly surprising that the 10 trade unions, who called for a nationwide strike against the new labour laws, have sought to expand their reach by, among others, asking for direct benefit transfers of Rs 7,500 per month to poor families as well as 10 kg of free rations per month to the needy; for good measure, the unions have asked for MGNREGA jobs to be raised to 200 days a year, and they have also asked for the recent farm laws to be scrapped so that they can get farmers—at least in prosperous states like Punjab and Haryana that benefit from FCI purchases—to support them. If the BMS is not supporting the strike, it is not clear if this is because it realises that India’s trade union movement just caters to the labour aristocracy—essentially workers in the organised sector—or whether this is because the larger Sangh parivar doesn’t want to add to the problems of the BJP government.

That trade unions continue to agitate on the old issues is sad since you just need to look at how employment has grown in countries like not just China, but even Vietnam after they streamlined their processes—and offered financial incentives, apart from creating top-class infrastructure—to know that worker interests are best served by rapid industrial growth, not the slow pace India has. To that extent, the unions should have welcomed the changes in the labour laws since, if the state governments follow the Centre’s lead—less than a tenth of the country’s labour laws pertain to the central government—this can lead to a sharp increase in manufacturing once the current Covid-induced crash sorts itself out. Keep in mind that, of the 1,535 Acts—with 32,542 compliances and 3,048 filings in a year for a pan-Indian manufacturing operation—around 30% pertain to just labour; and 47% if you look at the compliances. Perhaps the most meaningful change, other than the procedural simplifications, is the introduction of fixed-term employment that allows factories the flexibility in operations that they have been wanting for decades; to safeguard the existing workforce, these jobs cannot be converted to fixed-term contracts.

A trade union that is genuinely interested in the interests of all workers would have, similarly, welcomed the move to create pension funds for everyone; indeed, it would have pressed for government contribution to these funds as well. As Gautam Bhardwaj and Sanjay Jain (bit.ly/3dX7IWn) have argued in this newspaper, a well-executed pension scheme for the unorganised sector workers would have stopped the migrant exodus that took place from cities during the early days of the Covid-lockdowns as the workers would have had a pension corpus that they could have dug into. Ideally, trade unions need to reorient themselves and push for issues that benefit the entire workforce, not just their members. This, then, includes any measures—such as corporate tax cuts, better infrastructure, genuine deregulation—that help boost investment and manufacturing; trade unions need to agitate government to move from subsidies to the undeserving—FCI and fertiliser subsidies, food subsidies to the non-poor—to extending subsidised insurance (life, health and unemployment) to everyone. Even from the point of view of their existing workers, unions need to agitate for freeing them from the clutches of the EPFO and the ESIC. While the EPFO charges far too much for mostly just investing in the kind of fixed-income securities it does, ESIC has perhaps the worst health insurance coverage compared to even those run by the private sector, as a result of which, it has a surplus of over Rs 90,000 crore today!

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