At Work in the Informal Economy of India: A Perspective from the Bottom Up, by Jan Breman, Oxford University Press (RRP£32.50, RRP$60)
Among the many gripes about doing business in India, one of the most common is that rigid labour laws make it impossible to fire slackers or lay off workers during slow periods. But while labour is highly protected on paper, in reality only government employees and a few lucky private sector workers have job security.
More than 90 per cent of Indians toil in the informal economy – in tiny workshops or on building sites, as seasonal hands in rural industries such as brickmaking, as urban vendors and in low-level services.
In this regulation-free netherworld, the uneducated and the unskilled – mostly men but also women and children – eke out a basic subsistence in grim conditions, without predictable earnings, physical or social protection or any right of redress.
“Behind the façade of the middle to higher classes and their ever-increasing prosperity, so adored in the lore on shining India, lies the vast terrain in which the labouring poor masses are made to squat and toil in squalor,” writes Jan Breman in his important new book.
It is this group, specifically in the highly industrialised state of Gujarat, that Breman, a professor of comparative anthropology, has spent a lifetime studying, and whose working lives he sets out to illuminate here.
While mass rural-to-urban migration drove prosperity in the west and in east Asian powerhouses such as Japan, Breman argues, India has created the phenomenon of “labour nomadism”. Rural migrants unable to find a secure foothold in the cities drift from place to place, job to job.
The book – a central essay followed by 10 previously published papers – explores this Dickensian landscape, defined by a “floating army of reserve labour” often trapped in conditions Breman describes as “neo-bondage”. This will often require arduous physical labour, for 12 hours or more at a stretch, until the task abruptly ends and the worker must start the search afresh.
Unable to afford to support their wives or children in the cities where they work, these isolated men spend their productive years alone, until sheer exhaustion or failing health forces them back to their villages, dismissed, in the local argot, as “sucked oranges”.
This is a labour market also peopled by “jobbers” – canny brokers who provide loans to villagers against a “promise to come for work whenever required, with the implied condition that the wage will be lower than the going rate”. Usually, the wages offered will be so low that all family members – even children – must pitch in to help repay the debt.
The use of casual workers is not limited to small-scale, low-tech industries. Many large, profitable Indian and foreign companies outsource core jobs to small units to avoid taxes and regulation, or use big contingents of temporary labourers, employed through contractors, to shield the company from any potential claims.
Even the physical terrain of the cities is hostile to this group, many of whom, Breman notes, “may have been accepted in the urban space as temporary workers, but not as residents” by established city-dwellers. Urban planners have given little thought to the need for decent, affordable housing, instead relegating them by default to squalid huts made from discarded materials; or to tiny, fetid rooms with shared beds in unsafe tenements.
Yet India is now paying for such treatment. The government recently warned that industrial productivity is alarmingly low, reflecting companies’ lack of incentive to train short-term workers. Breman suggests that brutalisation of migrants and separation from families are fuelling urban violence, especially against women – a phenomenon seen in recent high-profile rape cases.
Like Indian business groups, neoliberal policy makers and economists argue that giving companies greater flexibility to manage their employees would reduce incentives to circumvent labour rules by using short-term contracts. Breman dismisses this suggestion, which he says “twists” logic. It is countered, he says, by the record in Gujarat, where a relaxation of rules has led to deteriorating working conditions, with labourers receiving few benefits of rising productivity, even as their employers’ profits soared.
The debate will not end any time soon. Breman’s book does not make for quick or easy reading, given its academic style. But it still provides an eye-opening perspective on a country where 1.2m young people – many with few skills, if any – are entering the labour market every month. With decent dignified positions for such jobseekers in alarmingly short supply, India’s much vaunted “demographic dividend” could turn out instead to be a demographic disaster.
The writer is the FT’s south Asia correspondent