Major Issues Plaguing India’s Unorganized Labor Sector

Many issues are plaguing India’s unorganized labor sector. And over the years, India’s Ministry of Labor has identified several major issues with migrant, child labor and home or bondage laborers.

Migrant Workers

There are two broad groups of migrant workers in India – those who migrate to temporarily work overseas and those who migrate domestically on a seasonal work basis only.

Approximately 4 million Indian workers are migrant workers in the Middle East alone. In fact, the majority of workers who built many of Dubai, Qatar, Bahrain and Persian Gulf’s famous modern architecture are Indians. They are said to be attracted by better salaries, which ranges from US $2 to $5 per hour, overtime pay and the great opportunity to support their families. In 2009, Middle-east based Indian migrant workers remitted nearly US $20 billion. However, once their projects have been completed, they are strictly required to return to India at their own expenses and without other benefits such as unemployment or social security. Also, there have been a number of labor cases and claims about abuses like unsafe work or poor living conditions.

As for domestic migrant workers, there are nearly 4.2 million of them. They are actually domestic workers and not domestic migrant workers. They range from full-time to part-time workers, temporary and permanent workers. Generally, they are employed for compensation in cash or kind, either they are in any household through agency or direct, to perform household work. While some of them work for a single employer, others work for a number of employers. Some are live-in, while others are seasonal workers. Apparently, the employment of migrant workers commonly depends on the will of either the employer or the worker or both, and compensation differs.

Debt Bondage Laborers

Bonded labor is a forced relationship between an employer and a worker wherein the urge is derived from an outstanding debt of the worker. Typically, the interest accumulates at a certain rate that is so high that the bonded labor arrangement lasts a very long period of time, or sometimes indefinitely.

More often, a worker was left with no options for employment in either the organized or unorganized sectors. Thus, they prefer the security of any employment, even the one that offers bonded labor. Although bonded labor is illegal in the country, it is usually applied by force, or sometimes it continues from custom. And unfortunately for most workers, once they enter into bonded labor, they are typically characterized by irregularity of information, opportunity, no time to look for some other alternative jobs and high exit costs.

Until present, estimates of the number of bonded labor in the country are still uncertain as it varies widely, depending on methods used in surveying, assumptions and sources. Recent survey of the official Indian government estimated at least a few hundred thousand bonded workers. However, in 1978, estimate already placed at 2.62 million. Meanwhile, in the 32nd National Sample Survey Organization, there are estimated 343,000 bonded workers in the country’s 16 major states, and some 285,379 of which were already freed by 1996.

The major employment sectors for debt bonded labor are as follow:

• Agriculture
• Stone quarries
• Brick kilns
• Religious and temple workmen
• Pottery
• Rural weaving, fishing
• Forestry
• Betel and bidi workers
• Carpet
• Illegal mining and fireworks

Child labor is common in family debt bonded arrangements, and in each survey, debt bonded laborers are typically found in unorganized, unincorporated sector.

In an aim to stop any and all forms of bonded labor malpractice, to protect the bonded labor as well as to forbid individuals and entities that hire, maintain or look for bonded labor, the country enacted Bonded Labor System Abolition Act (1976).

Child Labor

Based on 2001 statistics, India had some 12.6 million children aged 5-14 working either part time or full-time. Also, more than 60 percent of them are in unorganized agriculture sector, while the rest are in other unorganized labor markets.

Primarily, poverty, poor or total lack of education, and constant growth of unorganized economy are seen to be the most significant sources of child labor.

In a 2009-2010 nationwide survey, it was revealed that the prevalence of child labor had lessened to 4.98 million children or less than at least 2% of children in 5-14 age brackets.

Under the Article 24 of India’s constitution child labor is prohibited, but only in factories, mines or other hazardous employment.

In an effort to identify, prosecute and prevent child labor in the country, the Indian government has come up with the following measures:

• The Indian Penal Code,
• Juvenile Justice (care and protection) of Children Act-2000,
• Child Labor (Prohibition and Abolition) Act-1986

Researchers claimed that the inflexibility and structure of India’s labor market, informal economy size, legal obstacles preventing industries from ascending as well as lack of modern manufacturing technologies are some of the major macroeconomic factors boosting the demand for and tolerability of child labor.