issues relating to employment in india in the era of globalization (praveen jha)

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Issues Relating to Employment in India in the Era of GlobalisationAuthor(s): Praveen JhaSource: Social Scientist, Vol. 31, No. 11/12 (Nov. - Dec., 2003), pp. 47-65Published by: Social ScientistStable URL: http://www.jstor.org/stable/3517949 .

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Issues Relating to Employmentin India in the Era of Globalisation

DIt would be stressingthe obvious that the generationof productive :employmentopportunitiesoughtto be consideredanimportantpolicyobjectiveon anymeaningfulagendaof economicdevelopment,and onthis frontthe Indianexperience, preadoverdecadesnow, emerges n avery poor light. By all accounts, the problem of widespreadunemploymenthastendedto becomeprogressivelymore serious n therecentyears,and since the early 1990s, i.e. the period of neo-liberalreforms, it may have assumedcrisis proportions.The fact of sharpdeceleration in the rate of employment generation during the lastdecade (see Table 1) is widelyacknowledged,and the unemploymentrate in India,on currentDaily StatusBasis,as per the relevant NSSrounds,hasgone up from 6 percent n 1993-94to 7.3 percent n 1999-2000. Moreover,and not unexpectedly, ncreasein the incidence ofunemploymenthas been sharper or relativelymore vulnerablesocialand economic groups.The incidenceof unemploymenthas reportedlyincreased, nspiteof the reportedslowingdown of the growth of thelabourforce,(thelatterbeingsomewhatof apuzzle),in the recentpast.As perthe NSSsurveys, he labourforcegrowthratewas 2.43 percentper annum between 1983-94 and it came down to 1.31 percentperannumbetween 1993-94and 1999-2000.

The increasing gravity of the unemployment problem in the1990s,based on the findings emergingfrom all our majorlargescaledata systems, such as the Economic Census of 1998, PopulationCensus of 2001, EmploymentExchangeStatistics, he relevantroundsof the NSS etc., has frequentlybeen acknowledged n official circles,and two relativelyrecent initiativesof the PlanningCommission:(a)the Task Force on Employment Opportunity, headed by M.S.Ahluwalia, and (b) Special Group on Targeting Ten MillionEmployment Opportunitiesper year, headed by S.P. Gupta, haveexaminedthe relevanttrendsin some detail.Thesereports,aswell asseveral other studies seem to indicate that a continuation of theexperienceof late 1990smayaggravate he problem dramatically;orinstance, it has been suggestedby some that even with a high GDPgrowth rate of 8 percent per annum over the next decade, theunemploymentratemaytouch more than double of the currentoneby the end of the 10th Five Year Plan (for details,see GOI, 2002).


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Quite a few studiesby economistshave also appearedafter the NSS data forc--4 1999-2000becameavailable e.g. Sundaram,2001;Sen andJha,2001;Chadhau and Sahu, 2002, among others),analysing he emergingtrendsin some detail,and true to the reputationof ourprofession,(thatif there are two economists0 there must be three views!), some are quite optimistic about the latestcZ- developments.Later n this piece, the majorfeatures, ncludingthe bones ofcontention, regarding he pace andpatternof employment - unemployment-- developmentsduring the last couple of decadeswill be recalled.But beforeo that it maybe useful, I believe,to raisea couple of issues to contextualizethe

problembetter. The first of these relatesto a grandone, and is in a territorywhereeven angelswould probablyfear to tread,but I would like to stick myneck out: this is about the root causes of unemployment in contemporarycapitalism, n particulardevelopingcountries.The second issuealso falls in ahighly controversialdomain, and it is about the implicationsof the globallyascendant neoliberal economic policy regimes for the unemploymentscenario. There is a huge literatureon both these areas,and I do not intendsurveyingit here. I only propose to state a couple of argumentswhich arecentral to a perspectivethat may be useful, admittedly at a high level ofgenerality, n approaching he problemof unemployment.It is quite possiblethata non-economist choosingto visit one of the mostprominentdebates n the 1970s and 1980s,amongthe leading professionals nLabourEconomicsin the developedworldwould feel completelyunsettled.Iam referringhere to the debate among economists whether the so calledinvoluntaryunemploymentexists at all. In the US for instance,some of theleading neoclassical economists argued that substantial sections of thosebeing counted as unemployed by the currentpopulationsurveyswere infactengagedin searchingforbetterjobs or werevoluntarily obless (becauseof astrong preferencefor leisure in the present). Such a view appearedto havebecome quite prominent among economists inspite of the commonperception that unemploymentwas rampant and a major problem. NobelLaureateRobertSolow, amongothers,led the counter attack fromwithin themainstream trying to convince the profession that many among theunemployedwanted to work and were simply unable to find jobs. As Solowput it: 'I believe that what looks like involuntary unemployment isinvoluntary unemployment' (1980, p. 3). In the course of the 1980s, thisseemingly, obvious argumentbecame increasinglymore acceptable(whichwas facilitatedby analyticalconstructsaround the 'efficiencywagetheories'),and even high profile neoliberals like Lawrence Summers argued thatinvoluntaryunemploymentis an analyticallymeaningfuland usefulconcept,andsuch unemploymentconstitutesa serioussocialproblemthat needsto be

48 a targetof the public policy (Summers,1990).


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Issues Relating to Employment

Non-economists with some knowledge of labour history would have -p-been amusedby the abovedebate for anotherreason:our profession'sability


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much the same about the presence of involuntary unemployment, asunderstoodin moderndiscourses,sincethe emergenceof a largepropertylessa) workingclassduringthe course of transition to capitalism.Possiblythe onlybrief period when unemployment was not a significant problem in the0 developedworld was the peakyearsin the 1960s, the socalled GoldenAge ofc-4 Capitalism (Marglinand Schor, 1990).Those familiarwith the writingsof KarlMarx,a name which seems to bean anathema for many intellectualsbut whose contributions in terms ofo several insights into the working of capitalismremains unparalled,wouldz immediately recognizea compellingcase for the validityof the concept of a'reservearmy of labour'being a permanentfeature of capitalistsocieties in5> termsof their normal functioning,and not as some sort of aberration.Thosewho feeluneasywith Marx'spoliticsmayfeel more comfortablewith the sameconclusion reachedby 'politicallycorrect'MassachusettsBureauof Statisticsof Labour, Howeverprosperousconditionsmaybe, thereis alwaysa 'reserve

army'of the unemployed' (quoted in Keyssar,1986).Thus the appropriate question is not about the existence ofunemployment under capitalism,but about its structure and locations indifferentsocio-economic circumstanceswhichis where a historicallynuancedenquiryregardingthe trajectoryof transition to capitalismand subsequentdynamismin specificcasesmaybe useful inputs.It is with such an understanding hat the following argument,againat ahigh level of generality,maybe of some relevance.PaulBaran, n his PoliticalEconomy of Growth, written more than four decades ago, was deeplypessimisticas regardsthe prospectsof economic developmentin generalinthe countries of the ThirdWorld, and his skepticismwas stretched to theextreme by the 'Dependency School' theorists. However, the strategy ofrelatively antonomous development and often public sector ledindustrialisation,adoptedin varying degrees n severalcountriesof the ThirdWorld, resulted, in many cases, in growth outcomes which had beenunprecedented and quite respectable with reference to any appropriatebenchmark.Yet, most of these economies were unable to achieve much interms of addressingthe related problems of poverty, unemployment andoccupationalstructural ransformation.As is well-known,in most developedcountriesin the capitalistworld, the processof economic transformationwasassociatedwith the share of agriculture n total economic output and labourforce becoming quite small. In fact the early development literaturehypothesized this as the final destiny for all countries. However, theexperienceof the much of the ThirdWorld shows that inspiteof respectableoutput growth duringthe period of plannedeconomic developmentduringthe second half of the 20th century,vast masses of population continue to


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derivetheirlivelihood fromagricultural ector. As maybe seenfrom Tables2, X3 and4, the contrastbetweenthe contemporarydevelopedworld and the rest


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Table4Sectoral distribution of labour force in different regions

Early 1980s LatAgriculture Industry Services Others Total Agriculture In

Developed countries 7.2 32.3 60.4 0.1 100 5.8 2Transition economies andformer USSR 23.4 40.1 35.7 0.9 100 18.7 2South central (excl. Indiain 1980s) 54.6 16.8 26.5 2.0 100 55.3 1East and Southeast Asia 57.0 18.2 24.3 0.6 100 45.3 2Latin America 26.5 23.3 48.4 1.9 100 18.1 2Sub saharanAfrica 75.1 8.5 16.4 0.0 100Middle east and North Africa 40.6 20.8 37.4 1.3 100 21.5 2Source:KeyIndicators f theLabourMarket,ILO, Geneva,2001.

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Table6Structure of Income and Employment in Selected Countriesin Asia,Africa and Latin America(percentage)

COUNTRY YEAR SHARE IN EMPLOYMENT SHARE IN GDPAgrictilture Industry Services Agriculture Indusiry Services

Rep. of Korea 1970 47.6 17.4 351977 41.8 27.5 30.7 27 35 38

1980 34.2 29 37 15 40 451990 18.3 35.1 46.6 9 45 461998 12.2 27.8 56.6 6 43 51

Thailand 1977 73.5 8.7 17.6 27 29 441980 70.8 10.3 18.9 23 29 481990 64 14 22 17 32 511998 51.3 17.7 31 11 40 49

Pakistan 1977 54.8 18.5 12.3 33 23 441980 54.8 18.5 26.4 30 25 451990 51.1 19.8 26.6 26 25 491997 44.2 19 36.9 25 25 50

Bangladesh 1989 64.9 15.4 14.8 44 14 411990 66.4 13 16.2 38 15 461996 32 9.6 25 30.6 17.4 52

Egypt 1977 45.6 19.1 35.3 28 30 42

1980 41.9 21.5 36.6 18 37 451990 39 20.7 40.3 17 29 531995 34 21.9 44.1 20 21 59

Tunisia 1977 36 31.1 28.7 17 32 511980 33.4 33.4 29.1 17 35 481989 25.8 33.6 40.6 14 33 531994 21.6 34.4 44 15 32 53

Malawi 1977 50.1 19.5 30.5 47 18 351980 49.2 20.8 29.9 37 19 441990 44.6 23.9 31.5 33 20 46

Kenya 1977 84 6 10 35 20 451980 82 7 11 33 21 471998 78 8 14.5 29 16 55

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Table 6Structure of Income and Employment in Selected Countries (D(Din Asia, Africa and Latin America

(percentage) =COUNTRY YEAR SHAREIN EMPLOYMENT SHARE N GDP

Agriculture Industry Services Agriculture Industry Services

Chile 1977 18.4 24.1 57.2 10 29 611980 16.3 23.7 60 7 37 551990 19 25.2 55.5 N/A N/A N/A1998 14.4 25.5 60 8 35 57

Brazil 1985 26.8 22.1 49.3 13 33 541990 22.8 22.7 54.5 10 39 511997 24.1 20 55.8 14 36 50

Honduras 1977 60.5 15.5 24 32 27 411980 58.6 16.9 24.5 31 25 441990 50.1 16.7 33.2 23 24 531998 48.6 21.1 30.3 23 30 47

Jamica 1977 35.5 16.4 47.5 9 37 541980 36.8 15.6 47.2 8 15 551990 26.1 22.6 50.7 5 46 491998 21 18.2 61.8 7 35 58

Note: Thecountries akenareamongthetwo bestandtwo worstperformersroniAsia,AfricaandLatinAmerica,each in termsof per capita income(PPP) calculatedby the WorldBank (1998) and for whichdata are easilyavailable. Data regardingemploymentare from yearbookof LabourStatisticspublished by ILO and dataregarding rowthand structure f GDPare rom WorldDevelopmentReportspublishedbythe WorldBatik.HereAgriculture includes hunting, forestry and fishing. Industrycomprises mining, quarrying, manufacturing,electricity,gas, waterand construction.Servicesector ncludes rade,restaurants nd hotels, transport, torage,commnunication,inancing, insurance,real estate business ervices, ommunity, ocial andpersonalservices.

Table 5Employment Elasticity of Manufacturing Production (Based on ILO data)

1980-90 1990-95Indonesia -0.005 0.001South Korea 0.003 -0.0001Taiwan -0.003 0.004India -0.59 0.004France 0.003 -0.02Japan 0.003 -0.005United Kingdom 0.007 -0.03

Source:Chandrasekhar 2002). 61


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Table 7Levelsof Industrialization in the Third Worldand the Developed Countries, 1750-1990(United Kingdomin 1900=100)

Year Total Per CapitaThird World Developed Third World Developed

Countries Countries1750 93 34 7 81800 99 47 6 81830 112 73 6 11860 83 143 4 161900 60 481 2 351913 70 863 2 551928 98 1260 3 711938 122 1560 4 811953 200 2870 5 1351973 927 8430 14 3151980 1320 9910 19 4371990 2480 12090 29 412

Source: Bairoch (1993)

Table8Rates of Unemployment in Different Regions of the World, 1990-2000

1990 2000Developed Countries 6.1 6.2Europe 7.7 8.5Japan 2.14 4.8United States 6.0 4.1Latin America and the Caribbean 5.7 7.1 (1999)Asia and the Pacific 4.0 4.5 (1999)Transition Economies .. 11.9Middle East and North Africa 7.1 ...

Source::KeyIndicatorsof the LabourMarket1999 ( ILO,2001)

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Table 9All India Farm and Non-Farm Usual Principal and SubsidiaryStatus (UPSS)Employment Growth Rates (Persons): 1972-73 to 1983, 1980-81 to 1993-94to 1999-2000: Rural, Urban, and TotalSector Rural Urban Total

1972-73 1980-81 1993-94 1972-73 1980-81 1993-94 1972-73 1980-81 1993-94to to to to to to to to to1983 1993-94 1999-00 1983 1993-94 1999-00 1983 1993-94 1999-00

Agriculture 1.59 1.38 0.20 3.91 1.79 -3.39 1.68 1.40 0.06Non-Agriculture 4.54 3.37 2.34 4.12 3.50 2.98 4.32 3.44 2.69All Sectors 2.12 1.77 0.68 4.15 3.27 2.07 2.48 2.30 1.05

Source:Bhalla(2003)

Table 10All India UPSSEmployment Growth Ratesby Sector and Subsector, Rural,Urban and Total: 1972-73 to 1983, 1980-81 to 1993-94, and1993-94 to 1999-2000.Sector Rural Urban Total

1972-73 1980-81 1993-94 1972-73 1980-81 1993-94 1972-73 1980-81 1993-94to to too to to to to to to1983 1993-94 1999-00 1983 1993-94 1999-00 1983 1993-94 1999-00

Agriculture 1.59 1.38 0.20 3.91 1.79 -3.39 1.68 1.40 0.06Agriculture 1.59 1.38 0.20 3.91 1.79 -3.39 1.68 1.40 0.06

Mining andquarrying 5.13 4.32 -2.88 5.51 4.98 -4.01 5.26 4.54 -3.27Manufacturing 4.38 2.34 1.57 4.18 2.13 1.54 4.28 2.24 1.56Electricityetc. 9.00 5.00 -6.35 7.29 4.59 -4.52 7.94 4.75 -5.25Construction 3.99 5.19 6.95 5.45 6.52 6.15 4.55 5.74 6.61Tradeetc. 5.34 3.62 3.74 4.27 3.61 7.95 4.73 3.62 6.20Transport 7.05 5.09 7.35 4.91 3.16 3.83 5.61 3.85 5.28Services 3.82 3.38 -0.80 3.34 4.18 -0.58 3.55 3.83 0.67All Sectors 2.07 1.77 0.68 4.09 3.27 2.30 2.43 2.07 1.05Source:Bhalla (2003)

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gn References?-4 Bairoch,Paul (1993) - Economics nd WorldHistory:MythsandParadoxes,Harvesteru Whetsheaf.al)C) Baran,P, (1957) - The PoliticalEconomy f Growth,MonthlyReviewPress,New York.z Bhalla,Sheila (2003) - 'Employmentand EmploymentPolicy:Issues and Evidence',r,4 Mimeo, Institute for Human Development,New Delhi.- Chadha, G K and PP Sahu (2002)- 'Post -Reform Setbacks in Rural Employment:issues that Need FurtherScrutiny'Economicand PoliticalWeeklyMay 25-31.0Z Chandrasekhar,C.P. & J. Ghosh (2002)- The Market that Failed : A Decadeof New- LiberalEconomicReformsn India,LeftWorld, New Delhi.0 Chandrasekhar,C.P. (2002) - Employment Expansionand Globalisation n the Asia-> Pacific,Mimeo, CESP,JNU.

Darity, W., Jr. (1993) - LabourEconomics:Problems n AnalyzingLabourMarkets,KluwerAcademicPublishers,Boston.Food and AgriculturalOrganisation(2003) - WebsiteunderthePopulationDomain.Government of India (2002) Reportof the SpecialGroupon TargetingTen MillionEmploymentOpportunitieseryearoverthe TenthPlanPeriod,Planningcommission,New Delhi.Government of India (2001)- Reportof the TaskForceon EmploymentOpportunities,Planning Commission,New Delhi.International Labour Organisation (2002)- Global Employment Agenda, Interna-tional LabourOffice,Geneva.InternationalLabourOrganisation 2001 KeyIndicators f the LabourMarket,Geneva.Jha,PraveenK(1997) - AgriculturalabournIndia,VikasPublishingHouse,NewDelhi.Keyssar, A. (1986) - Out of Work : The First Century of Unemployment inMassachnsetts,New YorkCambridgeUniversityPress.Keyssar,A. (1993) 'LabourEconomics and Unemployment: An Historian'sPerspec-tive' in WilliamDarity,Jr(ed) (1993).Marglin,S. and J.Schor(eds) (1990) - TheGoldenAgeof Capitalism,Oxford.Patnaik,Prabhatand C.P. Chandrasekhar 1995) 'IndianEconomy understructuralAdjustment',Economicand PoliticalWeekly,Vol.30, No.47.Sen, Abhijit and PraveenJha - 'RuralEmployment:Patternsand Trends from theNational Sample Survey',mimeo, CESP,JNU,New Delhi.Sen, Abjijit (1996)- 'Economics Reforms, Employment and Poverty: Trends andOptions', Economicand PoliticalWeekly,Vol.31, No.35Solow, R.M. (1980)' On the Theories of Unemployment', American EconomicReview(March).Stiglitz,J.E. (2001) - 'Employment, social Justice,and Societalwell-being', Keynote64 speech o ILOGlobalEmpowerment orumNovember2001, Geneva.


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Summers, L.H. (1990) - Understanding Unemployment, Cambridge, MIT.Sundaram, K (2001) - Employment -Unemployment situation in the Nineties: SomeResults from the NSS 5th Round Survey', Economic and Political Weekly, March -17.World Bank (1986) - World Development Report, Washington.World Bank (2000) - World Development Indicators, Washington.

Lockouts in IndiaEditedby RuddarDattThis book is perhapsthe firstattempt o studythe menacingproblemof lockouts n Indiawhichhasplagued ndustriesnthelastthreedecades. Besidesgivingan overviewof lockouts rom1961to 1997,the authorhas madea specialstudyof lockouts n India.Hesuggests thatthecauses forlockoutsputforwardby the Indiangovernment n the LabourYearBook as well as Labour n West Bengal (apublication f the West Bengalgovernment) re not tenablesince the datais based on the employer'sperception nly.Themajor auses of lockouts,hesuggests are:downsizing f labour ndcasualization,increasingworkloadof workers,absence of a long-termperspectiveby employers, failureto bringabouttechnologicalupgradation, re-occupationwithshort-termrofits, nefficientmanagement, nter-familydisputes, indisciplineand violence to some extent and cost reductionduringperiodof lowdemand.RuddarDatt s presentlyassociatedwith he Institute f HumanDevelopment,NewDelhi,as a VisitingProfessor.Earlier e taughtEconomics or35 yearsattheUniversity f Delhi.Hewas the Presidentofthe IndianEconomicAssociationand IndianSocietyof LabourEconomics n 1991.ISBN81-7304-499-6 Royal8v0 2003 184p. Rs. 500

Re-Searching Indian WomenEditedbyVijayaRamaswamyDetlefKantowsky's uddishistennIndienheute(1999)broughto a German.Thisbook is a partof theongoingprojectby women to write hemselvesback intothe historical nd social canvas. Thepresentcollectionof essays takespride nbeinga partof thisvitalprocessof correcting enderimbalances ncenturiesoldpatriarchaltructures.However,nmanyways,these essays alsogo beyond heagendaofsalvageor retrievalrompatriarchalegisters.Besidesre-openingextsinwhicheven femalevoices echothemales,the authorsalso explore hesubjectivityf women hroughhemode offiction,art, he mediaand oral raditions.VijayRamaswamyeaches History t the JawaharlalNehruUniversity.HermajorpublicationsncludeTextiles nd Weavers nMedieval outhIndia1985);DivinityndDeviance:WomennVirasaivism1996)andWalking aked:Women, ocietyandSpiritualitynSouth ndia1997).She hasalsopublished rticleson economichistory,women'shistory, ndian olklore nd religious tudies in Indianand internationaljournals.ISBN81-7304-496-1 Demy8vo 2003 380p. Rs. 750

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issues relating to employment in india in the era of globalization (praveen jha)

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