Recent months have seen worker protests across states. Workers protested low wages and poor work conditions in an IOCL factory in Barauni, Bihar, in February. This was followed by protests in Surat, Gujarat. More recently, workers protested in Manesar, Haryana, raising similar issues. The latest unrest was in Noida, Uttar Pradesh (UP), where workers turned out in large numbers to protest.
These protests were in different industries, in both the public and private sectors, and in states with varying labour laws and industrial structures. Common to them was the fact that almost all workers were contractual; employed without formal social protection, their wages were low and work conditions poor.
Their demands were similar: an increase in minimum wages, proper working hours, payment for overtime, basic social security and workplace facilities.
This unrest is not surprising. Many of the issues on which the workers protested have been in the public domain for long. These went unnoticed by the mainstream media even as the situation worsened over the years.
Data on contractualization is available for organized manufacturing in the Annual Survey of Industries (ASI). The proportion of contractual workers was under 20% of the total at the turn of the century. By 2023, it had more than doubled to 41%. Increasing contractualization through labour contractors implies that industries are not obliged to provide workers any social security.
A nexus between recruiters and contractors exists across industries, not just in the private sector but also among government and public sector enterprise recruiters.
Minimum wages have not been revised in many states for more than a decade. They were last revised more than 10 years ago in Haryana and UP until worker protests forced their governments to revise them overnight.
While regular revisions of minimum wages are typically delayed, even basic bi-annual hikes to adjust for the rising cost of living are not followed in many states. After the protests in Haryana, its minimum wages for unskilled workers were increased from ₹11,274 per month to ₹15,221; these rose from ₹11,313 per month to ₹13,690 in Noida.
But even with these increases, wages remain lower than the minimum necessary for a decent living in urban centres. The hikes are not even enough to cover the rise in household costs due to inflation.
Labour-survey data shows that not only have wages for regular workers stayed low, these have declined in real terms since 2011-12, a fact acknowledged by India’s Economic Survey. Regular wages in urban areas declined by 1.2% per annum between 2011-12 and 2022-23, the longest period of decline in real wages.
While these have increased 1% annually in the last two years, they are lower than the real levels in 2011-12.
That the protests took place soon after the draft rules of India’s four Labour Codes were announced late last year raises questions on the nature of worker engagement in industrial units.
More than unremunerative wages, workers are unhappy with their work conditions. Many are required to work without breaks. And while there is no social security in a contractor-driven employment arrangement, even basic provisions such as leave and health coverage are denied.
Most of these come under the ambit of the Labour Codes, which seem largely designed to give enterprises greater leeway. Unfortunately, even the codes’ basic rights and provisions meant to help workers appear to remain only on paper.
These protests can be attributed to the dilution of worker rights for almost two decades. While their immediate trigger may have been a rise in living costs, the real problem lies in India’s political-economy approach to growth and industrialization.
The chipping away of worker rights has been justified as necessary for the competitiveness of Indian industry. Contractualization, low wages and denial of basic labour rights are seen as a way of controlling the workforce while keeping business costs low across the economy.
But an industrial relations environment that justifies growth at the expense of worker rights can hardly contribute to GDP growth.
Poor working conditions and meagre wages not only contribute to unhealthy employer-employee relations, but also reduce demand for industrial goods and services. Much of the demand weakness seen in India lately has been a result of a long stagnation in worker earnings.
Protecting worker rights should be part of India’s strategy for industrialization if its end-goal is faster economic growth.
The author is associate professor at Jawaharlal Nehru University and visiting fellow at the Centre de Sciences Humaines, New Delhi.