My head is exploding with all that I have learned. I have not written in almost three weeks because I am overwhelmed by the data. Since my last blog post, I have interviewed seventeen individuals, attended meetings at eight different organizations, visited two construction site creches (day care centers) and observed two organizing meetings of workers and advocates conducted in Hindi.
My social science mind wants to make sense—to observe, analyze and conclude. Behold western arrogance. India’s layers and contradictions of modern and traditional, urban and rural, internal migration, caste, religious differences, powerful patriarchy and residual feudalism are a gourmet stew while I have spent my life and work in the simple broth of the USA.
Walking among and looking through, I am a “sister from another planet.”
The first organizing meeting I attended included labor and worker leaders, organizers and researchers. It was a two-hour meeting on plans to pressure the Centre government and Parliament to improve the Social Security Act to more effectively cover workers in the informal sector. There were about 20 people in attendance and five women, not including me and the young graduate student who brought me to the meeting. I could understand quite a bit of what was going on despite the language barrier. The notes written on the white board were in English and provided an outline, but I could also tell when the “experts” –academics and lawyers –were dominating the discussion of the details of the proposals and when the labor leaders and workers took over to shape the strategies for outreach and organizing. Some things translate easily.
The term “informal sector” is used to mean workers who are outside of the legal system of workers rights and benefits. The outdated and racist term that was commonly used in the United States was “black market.” One might think of the “black market rum runners” of the Prohibition Era. Today we speak of the “underground economy” of under-the-table employment and flea markets in today’s US. In the construction industry, the underground has come above ground with the common practice of misclassifying workers as self-employed independent contractors. The unions are exposing the practice of “misclassification” and pushing for government enforcement to bring employers and employees into the legal system. Misclassification pushes the boundaries of the informal sector and absolves employers and government of their legally mandated responsibilities for fair pay and worker protections. Uber, AirBNB and the so-called “sharing economy” all open holes in the formal economy and add to the expansion of the informal economy. In addition to reduced protections for workers– which few in the US outside of unions and Bernie Sanders seem to care about– reduced tax revenues hurt almost all in the long run. The super rich who have created their alternative nation state of private security, banks, transport and school systems are the exception.
The underground economy in the US is estimated at about 8% of the Gross National Product (GDP). Eight cents out of every dollar is untaxed. That’s a lot of money lost to our common wealth, funds that could improve our schools and roads, reduce the cost of health care, expand education to pre-school, reduce the costs of higher education. Pick your cause.
India’s informal sector is over 90% of their total economy. Every 90 rupees of product and services produced in the Indian economy is extra-governmental and technically illegal.
The organizing meeting that I attended was a coalition formed to pressure for publicly funded benefits– health insurance, pension, maternity leave, etc.—to the 400 million workers in India who are in the informal economy.
But I am here to talk about the construction industry. Seventy percent of all construction in India is generated—that is owned—by government, mostly defense and infrastructure construction. It is publicly owned. So, based on my experience in the US and Europe, it is publicly regulated and therefore in the formal sector. No, I was told, 95% of construction is in the informal sector
This is a puzzle for me. How could an industry that is 70% publicly owned be 95% informal?
I asked Subhash Bhatnagar, lawyer, advocate and longtime leader of the movement for construction workers’ rights, how this could be. He explained how government contracts are given to large contractors who then bid the work out to subcontractors who bid it to smaller contractors who bid to smaller…. on and on through several tiers. I understand this because this is the organizational structure of construction in Boston and globally. On a project in Boston, there might be 500 workers who were employed by two dozen different companies. But if they are working on a public project, all the bosses and all the workers would fall under the relevant wage, hour, health and safety and workers’ compensation laws.
But what is different in India, Subhash explained, is that once the governments of India—municipal, state and national—award their contracts to a private construction contractor, the entire project moves into the informal sector. There is no monitoring or enforcement of workers’ rights. There are, of course, symbolic exceptions to this practice but government overwhelmingly walks away from the workers who will produce the publicly owned final product. They leave those workers to the market forces that rule in the informal sector.
I think a lot about Milton Friedman’s theory of the “economic man.” He might object to my oversimplification, but he is dead so here goes. The guru of Reagonomics, “trickle down” and the neoliberal renaissance claimed that, given the freedom to do so, people will make the choice that maximizes the benefits to themselves. I agree with Freidman. Given absolute freedom to exploit others and make more profit, business owners do. That is why we need the collective expression of the citizens’ desire for fairness, that is, effective government regulation and enforcement. I am sure that most of the large contractors of India are good people who love their families and wish no harm to others, but they pay their laborers pennies a day* with no benefits and drive to work past the shacks in which people live because they can. As many of the people I have interviewed have said, “The government of India does not take care the poor.”
Not to get ahead of myself, but I have been thinking about a question. What if the people of India threw out all the western charities that “care” for the poor and demanded that their government do its job?
*”Pennies a day:” I exaggerate for effect. Women I met yesterday who are working as labouers on a very large and very expensive commercial construction project in Navi Mumbai are paid $3.80 a day at today’s exchange rate.