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The lingering crisis of labour post-pandemic (Special)

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  • Published
    9th Dec, 2022


The International Labor Organisation (ILO) has recently released two reports: ‘Global Wage Report 2022-2023 and ‘Asia-Pacific Employment and Social Outlook 2022, highlighting the global employment scenario (post-pandemic).

What does the data show?

  • Trends in Nominal wage: The nominal wages rose to Rs17,017 per month in 2021 from Rs4,398 in 2006. The source referred to was the Ministry of Statistics and Programme Implementation.
  • Factoring in Inflation: The real wage growth in India plunged to -0.2% in 2021 from 9.3% in 2006.
  • Negative Growth: The negative growth in India started after the pandemic.
  • Neighbouring Countries:
  • In China, the growth decreased from 5.6% in 2019 to 2% in 2022.
  • In Pakistan, the growth is -3.8%.
  • Figures for Sri Lanka were not available
  • Impact on low earners: The greatest impact was on lower-income earners as they have to spend most of their disposable income on essential goods and services.

Is inequality rising?

  • At the Asia-Pacific level: Only the jobs in high-skill occupations saw a recovery from the COVID-19 crisis, and the same is true across all sub-regions.
  • Hit on Low-to-medium-skill jobs: There is an employment gain of 1.6% among high-skill workers between 2019 and 2021, but there is no such substantial gain among low-to-medium-skill workers.
  • Among G-20 Countries:A significant gap in the average level of real wages between advanced G-20 countries and emerging G-20 countries such as India has been observed.
  • It is on the level of about $4,000 per month in advanced economies and about $1,800 per month in emerging economies.

Asia-Pacific Regional Meeting (APRM) of the ILO:

  • The 17th APRM of ILO is being held in Singapore.
  • It came at an important juncture for the world of work as the region faces multiple challenges, including the continued impact of the COVID-19 pandemic compounded by the global food, energy and finance crises.
  • It brought together representatives of governments, employers and workers' organisations from Asia, the Pacific and the Arab states.

Criticism of labour codes at the APRM:

  • Violation of the tripartite agreements: India’s new labour codes violate the tripartite agreements between workers, employers and the government and give a free hand to employers.
    • The power of inspection has been left with employers through the new codes, and it will threaten the tripartite system in the country.
    • Trade unions in India have been opposing such policies.
  • The provisions given in the Industrial Relations Code Bill will dilute the labour rights of workers in small establishments having less than 300 workers
  • Mandatory compliance of registration of all workers (with Aadhaar cards) on the Shram Suvidha Portal may lead to exclusion of many beneficiaries.
  • The Code does not emphasize social security as a right, nor does it make reference to its provision as stipulated by the Constitution.

Other Highlighted Issues:

  • Gigantic industries and MNCs do not observe uniform labour standards in the country.
  • During the pandemic, contractual workers in the organised and government sectors faced difficulties with wages.
  • Presently the workers are facing low wages, lack of job security and social security benefits and had to suffer poor working conditions.

What are the ILO’s remedies?

  • Prudent price expectation: It is crucial to safeguard the standard of living of low-income households against unexpected future inflation hikes.
  • Managing wage inflation: The potential measures which are to be taken to safeguard the standard of living must not come from undesirable wage inflation.
  • Creation of decent formal wage employment: It is a prerequisite for a more equitable distribution of wages and income, and is a key contributor to equitable and sustainable wage growth.
  • Focus on the gender pay gap: The governments must focus on the gender pay gap as when women leave the labor market, they are less likely to return than men.
  • Collective Efforts: Collective efforts are required to gain momentum for growth. The government has to strengthen labor market institutions and wage policies.
  • Multilateral approach: There is an urgent need to address the negative effects of climate change; increasing inequalities; the poverty, discrimination, violence, and exclusion endured by millions of people.
    • Taking down Discrimination:The discrimination that women and girls continue to suffer in many parts of the world must end.
    • Ensuring HealthCare:Access to vaccines, adequate sanitation and essential healthcare for all must be ensured.
    • Reducing the digital divide: The growing digital divide between poor and wealthier countries needs to be reduced as it poses a potential speed-breaker when it comes to equitable growth.

Framework Regarding Labours in India:

  • Constitutional Framework: Under the Constitution of India, Labour as a subject is in the Concurrent List and, therefore, both the Central and the State governments are competent to enact legislation subject to certain matters being reserved for the Centre.
  • Legislative Framework: There have been several legislative and administrative initiatives taken by the government to improve working conditions and simplify labour laws. Most recent is the consolidated set of 4 labour codes which are yet to be implemented.

About the 4 Labour Codes:

  • The Indian Parliament enacted 4 labour codes: the Industrial Relations Code, 2020; the Code on Social Security, 2020; the Code on Occupational Safety, Health, and Working Conditions, 2020; and the Code on Wages, 2020.
  • These codes aim to consolidate and simplify the country’s current and overlapping labour laws by combining 29 pre-existing labour laws into 4.
  • Because labour is a concurrent subject, states must develop their own rules and only then can the codes be fully implemented.
  • There are suggestions of a phased implementation as the Ministry of Labour and Employment lays the groundwork for the 4 new labour laws.

Government measures to extend universal social security:

  • E-Shram portal: Helps in identifying workers in the unorganized sector and prioritizing their needs.
  • Extending health coverage through Employees' State Insurance Corporation ESIC.
  • Care for migrants: Government scheme of One Nation One Ration card
  • Opportunities: India has the largest youth population in the world and the country is observing a technological and entrepreneurial boom with start-ups mushrooming across the country.

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