[ad_1]
Sure, there are additional benefits. On the one hand, fifteen seconds of media fame for those who lead these state governments as business reformers. They may not give you much of a stimulus package, but, as the signal says, they are willing to make up for the missing money with permission to use the cheapest and longest-working workers’ labor force. Another benefit would be that the struggling entrepreneur could save a few hundred rupees a month on the usual bribe to labor inspectors who come to examine compliance with labor laws.
Labor laws in India are part of the façade of democracy that middle-class India confuses with reality. In fact, nine out of ten of India’s 500 million workers are in the informal sector, which does not support labor laws, minimum wages, social security and other symbols of civilized existence, even as a product of the imagination. Demand intersects with supply with primitive force in this area. The result is not an explosive explosion of creativity and unfettered prosperity, but a prolonged wail of misery by workers and complaints of low productivity, high interest rates, and mediocre quality for the rest. Whether labor laws are suspended high up in the cobwebs or trampled on the ground, it matters little in this part of the Indian production universe.
Labor laws count for something in the formal sector. Here, work is often organized into unions. They can point out the normative order established in the laws to press at home one demand or another. If union strength is enough to enforce the laws, they are. Otherwise, it’s simply about regularly paying labor inspectors. The notion that labor laws limit the employer more in India than in the workers’ paradise to the north is pure fiction.
In any case, to argue that high wages or organized unions inhibit growth is to ignore the world around us. Labor productivity per hour worked is the same in the US. USA, where unionization levels are low, as in France, where unions are powerful. When General Douglas MacArthur finally turned Japan over to the Japanese, after occupying Japan after the surrender of Japan after the atomic bombing of Hiroshima and Nagasaki, writing his modern pacifist constitution and overseeing the early years of the nation’s post-war reconstruction , ensured that 57% of the workforce was unionized. Americans wanted strong unions in Japan, as a bulwark against the return of militarism.
Japanese industry learned how to use unions to engage workers in a collective mission to increase productivity and quality. Korea is a union nation, but it has some of the most advanced car and electronics companies in the world. Europe has traditionally been unionized and reaped the greatest achievements of the Soviet revolution, through a social contract that made labor a partner and beneficiary of growth. German unions work with administrations to prevent mass unemployment in that country today.
Indian industry still maintains a simplistic view of labor relations: unions, bad, non-union, good. This overlooks an important point. The wage cost of a company is the purchasing power for the rest of the economy. If each company reduces its wages to the lowest possible level and extracts the longest hours of work from its employees, the result would be to reduce the total purchasing power in the economy and reduce the demand for companies that depend on consumers having free time, such as entertainment, travel, books and magazines. What is rational at the business level is irrational at the macroeconomic level. What can close the gap are unions. Unions lobbied to raise wages and contain working hours. At the aggregate level, this raises the market for each business and each company.
The enlightened industry would view well-paying work as an asset. Modern manufacturing requires that defects per million parts produced be very, very low, close to ten. Such levels of quality are not achieved with labor that earns little more than basic livelihood, but with workers who enjoy their work and workplace. The type of work practices we need depends on the type of ambition the Indian industry has. If your ambition is to set up sweatshops that produce things to sell at the local weekly market, you have the kind of labor laws that the leaders of Uttar Pradesh and the champion of Madhya Pradesh have. If the Indian industry wants to sell on world markets, it needs to achieve high quality in workplaces that, at a minimum, are considered a decent job offer.
The Center has not been in a hurry to amend its labor laws to bring them into line with UP, MP and Gujarat. Labor laws are on the concurrent list, which means that the Center and the states legislate on the same issues. The result has been 45 central labor laws and more than 200 state-level labor laws. If a state law violates a central law on the same subject, the central law will prevail. Therefore, the suspension of labor laws in the three states governed by BJP is likely to have an additional benefit: a lot of work for lawyers, as the suspension of labor laws is contested in court.
Following the exodus of migrant workers, the industry is likely to face a labor shortage and wages will rise as a result of supply and demand forces, and the suspension of labor laws will not alter that.
Ultimately, the main service provided by the UP, MP and Gujarat labor reforms is not to the economy, but to politics, by providing greater clarity, if necessary after the treatment of migrant workers, to the type of policy that India has and Power relations between social classes that the rulers consider ideal.
.
[ad_2]
