Tuesday, December 6, 2022
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India urgently needs Right to Work. We are in a Great Depression in slow motion

According to CMIE data, 6 crore Indians have stopped looking for work because they see no opportunity on the horizon. It’s bad news.

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Is Right to Work an idea whose time has come? The answer has to be a resounding YES, if we go by the severity of India’s unemployment crisis, and the range of proposals to tackle it. We need a mega policy, backed by a legal guarantee, that secures livelihood or compensatory allowance for everyone able and willing to work.

A plea for the Right to Work must answer three questions. One, do we need it? Two, is this the right solution? And three, can we make it work? Do we have the money?

Do we need it?

Recently, data on unemployment rate in India from Centre for Monitoring of Indian Economy (CMIE) flagged that only 40 per cent of the 101 crore people of working age in India are looking for jobs today. This figure is around 60 per cent in the rest of the world. The grim situation is only getting worse over time. The percentage of working-age people who are looking for jobs, (called the labour force participation rate) fell over the past five years from 46 per cent to 40 per cent, which means about 6 crore people stopped looking for work, clearly because they see no possibility on the horizon.

And, of course, not everyone who is looking for work gets it.  The latest CMIE estimate puts the unemployment rate at 7.6 per cent. That is 3.3 crore openly jobless. On a slightly wider definition, it would be close to 5 crores. Look at it any which way, we have nothing less than 10 crore people who are not working, but would have liked to work if they had an opportunity. The number could be as large as 14 crores, if we take ‘would be unemployed’ and ‘badly employed’ into account.

Compare this to the worst case of documented joblessness in human history. At the height of the Great Depression in the US in the 1930s, nearly 1.5 crore people were out of work – about 25 per cent of the workforce. The situation in India today is a slow-motion Great Depression, with many times the number of people affected.

These times need a desperate remedy. This effort has to go beyond piecemeal, sectoral approaches to promote selected industries (or industrialists!), or dubious efforts to promote “ease of doing business” or “atmanirbharta” in the hope that employment would somehow generate itself. Just as the US government responded in the 1930s with the New Deal, tackling this looming crisis requires a concerted, big bang, intervention by the government. Hence our proposal.


Also read: More jobs can shock-proof the Indian economy. Unemployment allowance can be cushion for now


What’s the solution?

The long-term solution to unemployment has to involve a rethink of the economic model, from macroeconomic policy to industrial policy to strengthening small enterprises. However, these will only yield results in the long term, and we do not have the luxury of time. The Right To Work will serve as a comprehensive response to address the crisis we face today.

Fortunately, we don’t have to start from scratch to think of ways to operationalise the Right to Work. We draw here on some recent proposals, notably by Professors  Jean Dreze, Santosh Mehrotra and Amit Basole. The theoretical basis has been laid down by socialist thinker Rakesh Sinha in the tract “Berojgari: Samasya aur Samadhan”.

The Right To Work is an umbrella that covers four different interventions. The first ask is a commitment by the government to directly increase employment where feasible and required. As the easiest step, the government can fill the estimated 25 lakh pending vacancies for some immediate relief, especially for educated youth. Besides, millions of additional jobs need to be created for badly needed and poorly supplied public goods such as health, education, policing, urban infrastructure and the reversal of environmental degradation.

The second intervention involves protecting the workers from exploitative wages that they are forced to accept due to too many people chasing too few jobs. Our Constitution provides for equal wages for equal work, a principle repeatedly affirmed by the Supreme Court. The government has to enforce it, including on itself, to protect crores of contractual workers.

The third intervention is to restore MNREGS to its original design, as a demand-driven scheme that offers manual work to anyone who asks, with no budgetary limits. In practice, the scheme has become supply-driven, with the central government squeezing the states of money to keep the programme going. This needs to be reversed to redress the rural employment crisis, accentuated by the reverse migration during the lockdowns.

The fourth intervention, a fresh one, would be an urban unemployment guarantee law.

Broadly speaking, this law would similarly guarantee 100+ days of work to anyone willing to work at minimum wage, and would cast a duty on urban local bodies to provide it. But this will have to be operationalised differently from MNREGS. Apart from unskilled work to create and maintain capital assets, the scheme would need to account for skilled workers and the needs of women who prefer part-time work much closer to their homes. There is also the opportunity in urban areas to involve the private sector in some manner, perhaps through an apprenticeship programme. Similar to the MNREGS, an unemployment allowance, perhaps at half the minimum wage, would be provided for those who apply but are not provided work.

Significant preparatory work has been already done – economists such as Jean Dreze and  Amit Basole have detailed proposals already. Several states, including Kerala, Himachal, Rajasthan, Jharkhand and Maharashtra, have already put in place similar schemes at the state level.


Also read: India saw a 30% decrease in jobs for young people since 2016. Here’s why


Can it work?

The benefits of such a wide-ranging intervention are obvious. Apart from providing much-needed employment to people, such interventions offer multiple benefits. Our urban infrastructure is in significant disrepair across India, particularly in smaller towns. In addition, creatively finding a way to employ and train unskilled workers in education, health and environmental preservation would assist our overstressed professionals, reverse decades of underfunding, and build a cadre of committed and skilled individuals. A well-run apprenticeship programme at scale would address skill gaps that every employer in India complains about, and offer a bridge between often inadequate education and the skills needed in the market. Besides, better wages reaching the bottom of the pyramid offers a multiplier effect that can help our economic recovery.

The only question is: Can “we” afford it? The first three interventions build on existing government schemes and would need some additional expense. The fourth one is a big additional expenditure. A team of Azim Premji University researchers led by Amit Basole estimate that 3.3 crore people could be employed in the urban employment guarantee scheme at Rs 2.8 lakh crore, or 1.7 per cent of GDP. Add to this, the additional budget for the first three interventions and we are looking at up to 3 per cent of the GDP. This is a significant, but necessary investment. Provided we are willing to include most Indians in our definition of “we”.

Compare this to some other expenditures that “we” have managed to afford in recent years. Banks spent Rs 2 lakh crores last year alone on writing off loans. The government plans to directly pay Rs 1.9 lakh crores in subsidies to industries. The lowering of the corporate tax rate from 30 per cent to 22 per cent cost Rs 1.5 lakh crores. Just in case you are worrying about additional revenues, chew on this one: billionaires in India gained Rs 20 lakh crore during the pandemic alone. Not to beat about the bush: Revenue is available and can be generated provided the government thinks of the unemployment crisis as its top political priority.

Would it do so? Obviously not, going by its track record. The Narendra Modi government shows no inclination to even acknowledge the scale of the problem, let alone act on the scale needed to address it. Time and again, this government has demonstrated that it has to be forced to listen through a sustained and focused political mobilisation. Such a mobilisation is the need of the hour. We need a campaign that forces a rethink on the ruling economic orthodoxy. India needs a people’s movement for Right to Work.

Yogendra Yadav is among the founders of Jai Kisan Andolan and Swaraj India. He tweets @_YogendraYadav. Vikram Srinivas is a engineer-turned-development professional interested in politics, who has worked in education, public finance and consulting. He’s from Bangalore and holds degrees from IIT Madras and Harvard’s Kennedy School. Views are personal.

(Edited by Neera Majumdar)

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