Resources Research

Culture and systems of knowledge, cultivation and food, population and consumption

Posts Tagged ‘wages

The worth of an agricultural wage day

with 4 comments

Being unorganised, rural and particularly agricultural labour constitutes a relatively vulnerable segment of the work force. Rural and agricultural labour is generally deprived of the benefits of collective bargaining and lacks the protection of labour enactments which their counterparts in the organised sectors of the economy can fall back upon during times of work uncertainty, or calculated mismanagement. Agricultural labourers however have to live with casual employment, frequent changes of employers as well as places and wide fluctuations in the pay.

All-India average daily wage rates in agricultural occupations during 2014-2015 for children, women and men. Based on data compiled by the Labour Bureau, Ministry of Labour, Government of India

All-India average daily wage rates in agricultural occupations during 2014-2015 for children, women and men. Based on data compiled by the Labour Bureau, Ministry of Labour, Government of India

Farming remains at the centre of rural Indian life, even as more men and women today seek out non-farm work. Using data from the MGNREGA records, the proportion of men aged 15–59 working solely in agriculture fell from 41% in 2004–05 to 31% in 2011–12. The decline for women was smaller, from 40% to 35%. Many men and women combine farm work with non-farm labour, whether or not they participate in MGNREGA.

The labour scenario in a rural area is influenced by a number of factors such as its topography, natural resources, population growth, pressure on land, level of economic development, level of utilisation of resources and the institutional factors, namely, land tenure systems and inheritance laws.

Rural wages are considered to have risen steadily between 2004–05 and 2011–12, but the increase has been greater at higher wage levels compared with lower levels. MGNREGA records show that men’s daily wages for agricultural work grew by 50% between 2004–05 and 2011–12, women’s by 47%. Overall, growth in rural wages is higher in states and districts whose populations have greater participation in MGNREGA but it is important to note that MGNREGA plays only a modest role in wage increases.

Taking national averages, about a quarter of rural households participate in the programme, about 60% of these would like to work more days but are can’t get MGNREGA work. This widespread ‘rationing’ of work affects about 29% of all rural households, but percentages vary between regions. Households in the lowest income quintile worked only 23 days a year when they were allocated work.

The information base on the working and living conditions of this segment of labour market is scanty. The only major source of reliable information on socio-economic conditions of the rural labour is the Rural Labour Enquiry conducted by the National Sample Survey Organisation (NSSO) every five years. Consumer Price Index Numbers for Agricultural and Rural Labourers, released by the Bureau every month, provides a basis for minimum wages in agriculture under the Minimum Wages Act,1948.

Advertisements

Written by makanaka

December 31, 2015 at 23:50

Finding the income gap in factories

leave a comment »

Soon after the liberalisation of India's economy in 1991 the rise in the average annual salary of the non-worker employee rose faster than that of the worker. From 1998-99, the difference became more pronounced and further from 2006-07 became very much more so.

Soon after the liberalisation of India’s economy in 1991 the rise in the average annual salary of the non-worker employee rose faster than that of the worker. From 1998-99, the difference became more pronounced and further from 2006-07 became very much more so.

When did the income gap between worker and white collar employee widen? The Central Statistics Office of the Ministry of Statistics and Programme Implementation has released its Annual Survey of Industries 2011-2012 for the factory sector. This small but significant compilation helps trace the evolution and trend of the gap in incomes from 1981-82 to 2011-12.

Using the figures given for wages and number of workers, the annual wages per worker (at current rates for that year) becomes available, so does the annual salary for non-worker employees. From 1981-82, when average wages per worker in the factory sector was Rs 7,197 it took 23 years for the wages to cross Rs 50,000. The rise was faster in the annual salary for non-worker employees which began at an average of Rs 13,325 in 1981-82 and crossed Rs 50,000 in 13 years.

In 1993-94, when the annual salary for non-worker employees crossed Rs 50,000 it was about 1.9 times the annual wages of the worker. In 2003-04 when the annual average wages of the worker crossed Rs 50,000 the annual average salary of the non-worker employee was about 3.1 times more. That gap continued to grow – 3.8 times more in 2007-08 and 4 times more in 2011-12.

While the next Rs 50,000 rise in the annual average wages of the worker took another nine years (from Rs 50,000 to Rs 100,000), over the same period (2003-04 to 2012-13) the annual average salary of the non-worker employee rose from Rs 156,000 to Rs 422,000 (adding the last year as a continuation of the trend, for this MoSPI series halts at 2011-12).

Written by makanaka

April 8, 2014 at 00:31

Still too few jobs, still paltry wages, says ILO

leave a comment »

ILO-employment_trends_2014_key_factsAlthough the Global Employment Trends 2014 report has adopted a mild turn of phrase to describe the vicious and sustained attack on workers and labour around the world, the message from one of the key reports from the International Labour Organisation is that economic ‘recovery’ has done nothing to create jobs, in fact the reverse.

The report has called for “an urgent switch to more employment-friendly policies” – that is, in contrast to the policies that encourage criminalising workers who organise themselves, and policies that drive – in a race to the deadly bottom – wages ever lower in the face of rampaging inflation. The weak global economic recovery has “failed to lead to an improvement in global labour markets”, the ILO report has said, with global unemployment in 2013 reaching almost 202 million.

While this is a very large number, we should remember that the ILO, a United Nations agency, relies on official statistics given it by the countries themselves. Even with allowances made for the true nature and scale of unemployment and under-employment, recommended to the ILO by trade unionists and researchers who study labour trends and conditions, the numbers available in the report will be a fairly large under-estimate of actual conditions.

ILO-employment_trends_2014Nonetheless, the Global Employment Trends 2014 report said that employment growth remains weak, unemployment continues to rise as a trend in all the world’s geographic regions, and especially amongst young people, and that large numbers of discouraged potential workers are still outside the labour market. The report has also bluntly said that “profits are being made in many sectors, but those are mainly going into asset markets and not the real economy, damaging long-term employment prospects”.

In developing countries, informal employment remains widespread, and the pace of improvements in job quality is slowing down, the report said. That means fewer people are moving out of ‘working poverty’ – that is, those who have some work but that work is not enough to keep their households consistently above a given income and food calories poverty line. In 2013, the number of workers in extreme poverty – living on less than the (widely-criticised and altogether meaningless World Bank) US$ 1.25 a day – declined by only 2.7% globally, which is one of the lowest rates over the past decade, with the exception of the immediate crisis years.

Periods of unemployment for job seekers and those laid off have lengthened considerably, the report said; in some countries such as Spain and Greece, job seekers need twice as much time before landing a new job than before the crisis (with no assurance that the pay they will receive for the new job matching their last drawn salaries or wages). More and more of those potential workers are discouraged and remain outside the labour force, “leading to skills degradation and obsolescence, and rising long-term unemployment”.

The very odd macro-economics of food prices and food inflation in India

with 3 comments

Food inflation has hurt, but we have just the prescription for it. So says the Economic Advisory Council to the Prime Minister of India. This group of the country’s seniormost macroeconomic planners is considered to be as heavyweight as they come, and have considerable influence on policy in India. The major ministries listen to the pronouncements of the EAC very attentively – finance, commerce and industry, power, steel, agriculture, infrastructure. India’s industry associations and business interest groups do the same – they are the Confederation of Indian Industry (CII), the Associated Chambers of Commerce and Industry of India (Assocham) and the Federation of Indian Chambers of Commerce and Industry (Ficci).

But amongst the five members of the EAC (all ‘Drs’, naturally) there are no women. There is no trade union member, there is neither nurse nor teacher, there is no housewife and there is no bus driver, there is no municipal sweeper and no roadside food vendor, there is no-one from a ‘scheduled caste’ or a ‘scheduled tribe’, in fact there is no tribal at all, there is neither artist nor essayist, there is no-one to speak for the old folk of India and none to explain the dreams of India’s youth. Still they call it a council to which the country’s prime minister listens. What he and his ministerial colleagues learn from these five cosseted greybeards in their ivory tower I can hardly imagine.

The price of a kilo of rice, from 2006 to 2011, in 49 urban centres in India.

Let us see why it is so difficult to find utility (the word classical economists make much of) in the pronouncements of this cabal.

They said: “Very high rates of inflation have characterized the last two years. Much of the inflationary pressure came from primary foods, including cereals in the initial months.”

True.

They said: “While, open market intervention and large releases under the public distribution system (PDS) helped to stabilize the price of cereals, pressure continued to come from rising prices from other primary food items – especially pulses, milk, eggs, meat & fish.”

What does “open market intervention” mean? If it means the central government buying foodgrain to funnel into the public distribution system, this is a method riddled with corruption and crippled by speculation. There are no “large releases” different from the normal schedule of releases which in a country like India are large anyway. Cereal prices have not stabilised – not in 2011 and 2010 and not at any time in the last five years.

They said: “Greatly improved output of kharif pulses in 2010 combined with marketing of imported pulses at controlled prices, helped to curtail the inflation in pulses by July 2010. However, prices continued to rise for fruit, milk, eggs and meat & fish.”

Inflation in the prices of pulses has by no means been curtailed, controlled or even understood. Many kinds of pulses in India are consumed in many different ways, and there is demand not only from final household consumers but also from the dispersed and very varied small foods and snacks manufacturers for whom pulses are a necessary ingredient. Fruit, milk, eggs, meat and fish – all scarce items in the food basket of the poor but high-margin items for the food retail stores in urban India. The EAC has made no mention of why prices for these foods rose – homework not done.

They said: “The prices of vegetables took an unexpected turn in December 2010 and January 2011, resulting in an increase in the wholesale price index of vegetables by 34 and 67 per cent respectively in these two months. In consequence, primary food price inflation stayed in the double digits.”

Not only in December 2010 and January 2011. Several staple vegetables have been the actors in price volatility operas in all the 49 urban centres for which  India’s Food and Consumer Affairs Ministry monitors retail prices. To blame, in my view, is the steady ingress of the food logistics sector (itself part of the corporatisation of food and agriculture in India) into urban centres beyond the major metropolises. The “cold chain” and “value chain” evangelists work for the retail food and processed foods industry, and can exercise degrees of arbitrage which are wholly ignored by the EAC. Inside the market, there was no hint of the “unexpected”.

The price of a kilo of wheat, from 2006 to 2011, in 49 urban centres in India.

They said: “Such a lengthy period of sustained high food price inflation had its expected impact on money wage rates and other cash expenses, which in turn began to get passed into the price behaviour of manufactured goods. Year-on-year inflation for manufactured goods rose from around 5 per cent to 8 per cent in September and October 2011.”

Shouldn’t fossil fuel products and the prices we pay for them share the blame? I think a cursory study of the prices for OPEC and non-OPEC crude products will explain a lot. And besides, “wages” are wages to people who – being mostly in the informal sector and unorganised labour – cannot bargain collectively nor are represented in policy-making bodies (like the EAC), so their money wage rates have not risen in tandem with inflation. Quite the contrary, for rural labour (agricultural and non-farm both) the average household spends 65% of its income on food.

[You can get the EAC Review of the Indian Economy 2011-12 document (pdf) here] [You can get a plain text file of the paragraphs on food and agriculture, prices and inflation (txt) here]

They said: “The net effect was that the headline rate of inflation stayed close to 10 per cent for an extended period of twenty two months.”

True, even for whatever is meant by “headline rate”.

They said: “It should not be forgotten that throughout this period there has also been a suppression of the headline rate insofar as the prices of several refined petroleum products, especially diesel, continued to be restrained by policy – which has had an adverse impact on the subsidy bill and therefore on government finances and also on the finances of the public sector oil companies.”

Oh we are so distressed by the hurt caused to government finances, especially coming on top of the enormous tax write-offs (called “forgone tax revenue” in India’s quaint public accounts jargon) given to the esteemed members of CII, Assocham and Ficci, many of whom are direct beneficiaries of the measures that led to a high “headline rate” of inflation in the first place. Money for jam, I would call it.

They said: “The effort of public policy, especially monetary policy, seems to have had its desired effect. The headline rate dropped to 9.1 per cent in November and further to 7.5 per cent in December and has dropped further in January 2012.”

Now I know that the spreadsheet program supplied to the EAC for such calculations is provided by Messers Alice in Wonderland GmBH.

They said: “The welcome developments in the easing of inflationary pressures will enable the RBI to adjust its monetary stance over the next several months. However, the continued pressure from the fiscal side will continue to impose some limitations. Hopefully the extent of the fiscal burden may ease in 2012-13 and create conditions that are more conducive to investment and economic growth.”

Ah yes, in case we were momentarily misled, this is to remind us that the purpose of high-level panels of greybeards is to prove circuitously to the proletariat that conditions conducive to investment and economic growth matter (so very much) more than our shrinking wages and the spiralling prices we pay for our daily bowl of rice and scraps of vegetables. We stand educated.