Lockdown: Challenging times for the working class

The Covid-19 pandemic has wreaked unprecedented havoc on the economy and the Indian working class is suffering tremendously. The abrupt announcement of one of the harshest lockdowns in the world has put the working class under enormous economic pressure, as evidenced in the massive job losses. Reports from the Centre for Monitoring Indian Economy (CMIE) indicate an urban unemployment rate of 30%, the highest in decades. The abruptness of the imposition of the lockdown betrayed a glaring lack of understanding of workforce composition in India. More than 93% of the country’s workforce is in the unorganised sector, with little or no access to legal protection, lack of job security, social security and most importantly, eking out a hand-to-mouth existence. For these workers, their lives depend on their livelihoods and their livelihoods were destroyed by the lockdown. The sight of migrant families trudging back home in the gruelling summer heat from inhuman cities will forever haunt our collective conscience as a man-made disaster that could have been averted.

Twin challenges

The pandemic poses two major challenges to the working class: a) income & job security; and b) health and safety. Often, these two issues are intertwined; a health shock pushes the family below subsistence levels. We note a serious lack of focus from policymakers on both these counts. Let us examine some of the policy responses thus far.

The central government actively pushed state governments to carry out pro-industry labour law amendments. Uttar Pradesh, Gujarat and Madhya Pradesh shockingly announced a holiday from the application of almost all labour laws, including the Minimum Wages Act. Karnataka also undertook pro-industry amendments, such as introduction of the fixed-term employment policy. Karnataka has deferred for a year the payment of dearness allowance of Rs 417 payable to workers earning minimum wages. It is astounding that such a wage cut from the most vulnerable section of the workforce is expected to help the industry tide over the crisis.

It is also a matter of great concern that the central and state governments conflate the needs of the economy with the wishes of the corporate sector. This is a warped view, with no basis in real data. Karnataka, without recourse to diminution of workers’ rights, has always attracted stable investment. A congenial industrial environment and transparent, unbiased application of the rule of law without rent-seeking practices will help attract stable investment.

The engine of our economy is consumption, fuelled by the working class and the common people of the country. Consumption and private investment account for over 60% and 22% of GDP, respectively. The private sector investment rate has remained stagnant for over three years now and therefore it is foolhardy to expect “green shoots” in the economy in terms of investments in new factories or capacity expansion in these times.

There is not even a modicum of understanding of the problems of the working class in the headline-grabbing Rs 20 lakh crore economic stimulus announced by the Prime Minister. There are no direct cash benefits or income/wage support schemes in the stimulus. The industry lobby, which has welcomed the economic stimulus, should stop demanding the diminution of workers’ rights and wages under the garb of the Covid-19 pandemic. Supply-side measures, such as the drastic reduction in corporate tax rates in last year’s Union budget, have not resulted in any increase of private investment but only helped to line the pockets of those in the corporate sector.

The better way

Job creation and increased real incomes aid wealth distribution and consumption in the economy. The diminution of workers’ rights, wage cuts and job losses will lead to a general decline in aggregate demand and send the economy into a tailspin. Therefore, it is high time that the government puts money into the pockets of the bottom 90%. At this juncture, there is simply no alternative to a universal basic income scheme in order to revive the economy. The central trade unions of the country have demanded a basic income of Rs 7,500 per month to every family below the income tax ceiling. In order to protect jobs and incomes, we need a combination of wage support and unemployment allowance schemes for the industry, as undertaken by major economies like the UK, the US, Germany, France, Brazil and South Korea.

There is also an urgent need to tackle the fear psychosis about the Covid-19 pandemic created amongst the workforce by addressing their health and safety concerns. Knee-jerk reactions in the form of frequent and unplanned lockdowns only intensify this fear. In the complete absence of specifically tailored regulatory safeguards governing the workplace, workers have a real fear of contracting the infection from their workplace and spreading it to their families. There is sufficient evidence suggesting that scores of workers in Bengaluru have contracted the infection from their factories. Countries such as Australia, Brazil, Canada, South Africa, the US, etc., have declared Covid-19 as an occupational hazard, to aid timely medical attention and effective containment. This recognition places the responsibility of health and safety squarely on the employers.

The government should mandate employer-led Covid-19 insurance coverage for workers and their families to meet the costs of testing and medical treatment, in addition to instituting a robust standard operating procedure for workplaces in terms of hand and respiratory hygiene, physical distancing, PPEs, contact tracing and environment management. A special provision of quarantine leave for 14 days with wages should be introduced for affected workers, primary contacts and workers in containment zones. Instead of ham-handed measures to pamper the corporate sector, the policymakers will do well to rely on data-driven evidence, listen to the voices on the ground and then frame policies to address this great socio-economic crisis.

(The writer is Secretary, All-India Trade Union Congress, Bengaluru)