India’s Self-Inflicted Labor Pains

Workers say they aren’t going back to cities where they were suddenly cut loose because of the virus

By: Neeta Lal

As India gradually opens its economy after a three-month lockdown triggered by the spread of the coronavirus, it faces an acute labor shortage caused by the mass exodus of millions of migrant workers from cities to their native villages. That exacerbates an economic crisis that is expected to see a contraction of anywhere from 5 percent to 10 percent of GDP, the biggest reversal in four decades.

The hurriedly imposed lockdown on March 25, which confined India’s 1.4 billion people to their homes, resulted in the loss of livelihoods for millions. As companies shuttered and construction activity ground to a halt, migrants fled to their villages, often walking for days on highways or hitchhiking in the back of overcrowded trucks, throwing all social distancing norms to the wind.

Many died in accidents along the way, strengthening their resolve to never return to urban work despite the government easing restrictions to reboot industrial activity. Thousands of stranded workers ran out of food and money, with nearly four out of every five not paid by their employers, surveys estimate. Over 60-70 percent of the labor force employed in the capital city New Delhi had returned to their native homes during the lockdown.

According to the Maharashtra Chamber of Housing Industry, the apex industry body in the Mumbai Metropolitan Region, nearly 700,000 of the 900,000 on-site real estate workforce returned to their home towns after as Mumbai emerged as the country’s worst-affected Covid-19 hotspot in April, says a report in Hindustan Times.

The construction and real estate sectors have suffered worst. A survey by staffing firm Teamlease Services states that the sector faced a shortage of 52 percent of staff and the manufacturing sector a 44 percent deficit.

The Census 2011 pegs the total number of internal migrants in the country (accounting for inter- and intra-state movement) at a staggering 139 million. These migrants form the backbone of economic activity in Indian cities. Working as loaders, drivers, housekeeping staff, construction workers, security guards and domestic helps, among others, this invisible workforce keeps the wheels of the informal economy turning.

With the economy now stirring back to life in the midst of pandemic that continues to grow, with 794,000 affected – third in the world behind the United States and Brazil and more than 25,000 new cases overnight – companies and factories are trying to woo these daily wage-earners back to sites with an array of sops – double wages, bonuses, food, transportation facilities and medical allowances. Some are setting up hostel and healthcare facilities for blue-collar workers near their factories.

Driven by approaching deadlines and a scanty workforce, many desperate real estate companies are booking expensive air and AC train tickets for their workers. “Our project is delayed by at least a year, and if we don’t get workers fast, it will be delayed further which will be ruinous for our businesses,” said Swapan Mistry, vice president for business development at the Gardenia group of real estate companies.

Three Chennai-based real estate developers recently pooled money to charter a flight to ferry back skilled migrant workers from Bihar last month, bringing in 150 carpenters, painters, granite workers and scaffolding experts from Bihar, Jharkhand and West Bengal. In Kerala, one real estate tycoon bought air tickets for over 100 laborers from West Bengal.

State governments too, are dangling carrots to get migrants back to work. The Kerala state government has introduced a scheme called Awas for all migrant workers which entitles them to accommodation, free medical treatment worth up to Rs25,000 (US$332.7) in government clinics apart from a host of other benefits.

Even big consumer products makers such as Dabur, Parle Products, and PepsiCo are going the extra mile to woo migrant laborers with cheap or free accommodation, higher salary and medical insurance.

In agriculture-dominated states like Haryana and Punjab, known as the granary of India, large landholder farmers are shelling out wages that are three times pre-lockdown rates.

“In several parts of Punjab, the labor charges for planting crops have skyrocketed to Rs12,000 ($170) on a one-acre plot. This is three times the old rate,” said Bhiku Ram, a landholder farmer in Bhatinda. Ram recently paid for train tickets to get 50 laborers from Bihar to tend to his maize and wheat crops which suffered under the double whammy of a locust invasion and labor crunch.

No state has been left unaffected by the labor crisis. The salt mines of Gujarat, a highly-labor intensive sector, are paying more than double to those willing to work in their salt fields. Workers are also getting paid for the 14 days of quarantine plus food. “We’re offering double salary to those who have agreed to work in the mines plus food and shelter. This is the biggest crisis we’re faced in our industry,” informs a member of the Gujarat Salt Refinery Welfare Association.

Labor experts say the crisis could have been averted – or at least its impact softened – if the employers and government had taken better care of migrant workers. Small wonder, many employees are unwilling to come back fearing infection in the cities or due to family pressure. Many say they are still hurting from the maltreatment of their employers and apathy from the State.

“I walked with my old parents, pregnant wife and three young kids for days from Delhi to our village in Rajasthan,” said Ram Prakash, 33, a construction laborer. “We ate sparingly, our feet were full of blisters and we had no money left to even buy chappals. I will do farming in my village now and have no intention of going back to the city. Why should I return to the city which couldn’t take care of me?”

About 13 percent of 17,000 migrants in contact with the volunteers of Stranded Workers Action Network, a collective of relief workers, said they would seek work in their home towns in the future rather than return to cities.

Despite the groundswell of angst and frustration, however, experts say those forced to return to their villages are unlikely to have infrastructure or jobs to support them. Moreover, the government’s flagship rural job guarantee scheme – MNREGA – won’t be able to sustain the millions of migrant workers as they offer wages which are a fraction of what these migrants earn in cities.

India has one of the world’s largest migrant economies. So the collateral damage to economies of villages where these workers remitted money will also be substantive, say analysts.

“The migrant worker population has led to a growing domestic remittances market, estimated to exceed US$20 billion annually,” said Jignesh Parikh, a labor officer with the Reliance group of companies. “This is because migrants working in urban areas -- construction workers, gem polishers, masons and skilled artisans -- send money back to their families in villages which has steadily improved rural economies too.”

These money transfers from migrant laborers to villages serve 10 percent of households in rural India and finance over 30 percent of household consumption in remittance-receiving households, buttressing the importance of urban growth for rural families, according to a report in Network 18.

Despite a flourishing migrant economy, however, India has some of the most outdated labor laws in the world, employing one of the largest informal global workforces with no official record-keeping for migrants nor any data available about their employment in various sectors. Lack of data deprives this demographic of social security, minimum wages or health benefits in industries as diverse as manufacturing, construction, or hospitality where they are employed in millions.

“India possesses no central registry of migrant workers despite a legislation being passed 40 years ago to establish such a database,” said Parikh. “Instead, migrants remain an invisible group missing from urban planning, nor are they factored into the city’s population eligible for rations and other food subsidies. They are rarely counted for either in their villages.”

Thus, he said, the single biggest takeaway from the pandemic is that by maltreating this disempowered workforce we’re not only harming their interests but also imperiling the country’s economic health.


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