Unemployment and migration

Fifty-six Biharis were murdered in Assam in November 2003, over a week of sustained ethnic violence. In the face of intense competition for the semi-skilled D category of jobs (requiring a minimum of eighth standard education) in the Indian Railways (the single largest employer in the world), targeted bloodshed was the answer. A mere 2,750 vacancies in Assam had attracted 20,000 prospective applicants from Bihar. This prompted the local ULFA (United Liberation Front of Assam) to call for protection of employment opportunities for the sons-of-the-soil, a long-standing ideology of Bal Thackeray’s Shiv Sena in Maharashtra. In the days of violence, 11 wage labourers were also brutally murdered because they hailed from Bihar. But what is the root of a force so vicious and desperate that it instigates mass murder on ethnic lines?

Jobless growth: trends in India

This incident can be interpreted as a symptom of a larger malaise. The root of the problem is ‘jobless growth’ in the Indian economy, that is, despite an acceleration in the growth rate in India; the pace of creation of work opportunities has not kept pace with the growing requirement. In the post-liberalisation period, unemployment on a Current Daily Status basis rose from 6.0 percent in 1993-94 to 7.3 percent in 1999-2000 resulting in an additional 27 million job seekers. The most disturbing fact is that of these, 74 percent are in the rural areas and 60 percent among them are educated.

There is substantial decline in employment elasticity (e.g. increase in employment for every unit rise in GDP) in almost all the major productive sectors, except for transport and finance. In agriculture, the employment elasticity has dropped to near zero. The reason for the phenomenon of jobless growth could be that growth in India has essentially been capital intensive. Further, the public sector is in the process of shedding excess labour in the name of downsizing for meeting the efficiency challenges of market competition.

Regional imbalances

This trend of rising unemployment is compounded by the existence of regional imbalances in development within the country, which have collectively accelerated the phenomenon of migration. All theories of migration concede that migration occurs when the region of origin lacks the opportunities which the destination promises. It is inherently a combination of pull and push factors. Variation in economic development across regions is a primary motive for migration to greener pastures. The rural poor are concentrated in eastern India, and in the rainfall-dependant parts of central and western India, which continue to have low agricultural productivity, while the bulk of the jobs are being created in western and southern India.

Inter-state labour migration is an important feature of the Indian economy. Most of this movement has been from the most populous and poorest states with net in-migration being higher for the more developed states. Gujarat and Bihar provide an interesting contrast in terms of migration. The population entering Bihar was 364,337 and that exiting the state was more than three times higher at 1,226,839. (Census 1991) In contrast, the in-coming population for Gujarat was double that of Bihar at 716,190 and the out-going population 305,738, a quarter of the population leaving Bihar. Further, there exist intra-district movements. In Surat, labourers from the eastern talukas move to the irrigated western talukas like Ucchal and Nirzar, which are irrigated by the Ukai project. Census 2001 migration tables have not yet been released.)

This increase in migration is essentially due to regional differences in the population pressure on land, inequality of infrastructure, industrial development, and modernization of agriculture. In particular, the developed areas have increased demand for labour during specific seasonal activities, especially sowing and harvesting in the case of agricultural activities. As this demand often supersedes the availability of local labour, these developed regions offer a higher wage rate and/or greater number of days of employment. The agriculturally developed regions are invariably areas which have extensive canal irrigation and HYV (high yielding variety) technology. The demand for labour also exists in seasonally based agro-industries e.g. rice mills, sugar factories, canal construction, road construction, etc.

Implications of migration: evidence from Gujarat

However, in the Indian context in recent decades, certain new migratory trends can be discerned, which indicate that its effects may be unfavourable both at the macro and micro level. There is evidence from different secondary studies in Gujarat to identify these new trends.

One is excessive migration. In Gujarat, rural-rural migration, especially from the drought-prone to the agro-climatically better-endowed districts, seems to have created overcrowding in the districts of destination. This is reflected in the fact that some of the most drought prone districts such as Amreli, Kachchh, Surendranagar and Rajkot, have relatively higher labour productivity vis-à-vis the agriculturally prosperous districts like Junagadh, Kheda and Mehsana. Invariably, migrant labour is paid at lower wages compared to local labour, and the implementation of the Interstate Migrant Workman (Regulation of Employment and Conditions of Service) Act of 1979 is largely on paper. Migrants from backward regions are willing to accept any distress wages that are offered as long as they have access to employment. In the bargain they undercut the employment prospects of local labour. Their excess supply also contributes to reducing the wage rate.

The phenomenon of overcrowding appears to be both a cause and a symptom of the exploitative labour process of distress migration. The growing phenomenon of rural-rural migration also has important implications for future generations who would also suffer from the same debilitating lack of opportunities and low productivity. For example, whole families of tribals from the Dang district of South Gujarat migrate for six to eight months to work in the sugar factories in the plains, resulting in their children being unable to enrol in schools.

Secondly, Jan Breman draws attention to a new phenomenon of circulatory migration in South Gujarat. Employers prefer to hire migrant labour, as they are considered to be cheaper and more docile than local labour. Consequently, labourers need to migrate in search of jobs, which they are denied in their native region. This perpetuates a vicious cycle of migration. Also, there often seems to be an inherent specialisation among labourers according to their place of origin, resulting in region and task specific movements. For example, road workers originate from the Panchmahals, quarry workers from Bharauch, cane cutters into South Gujarat from Maharashtra, and rice mill workers from the Jalan district of Rajasthan. These location-specific ‘skills’ however often are inconsequential for unskilled jobs with high content of physical labour. They are nevertheless perpetuated as a justification among employers to hire outstation labour.

These processes of seasonal migration have even developed into semi-formalised systems with the active participation of contractors or mukadams as middlemen who gather migrant labourers for prospective employers. The seasonal movements are often debt induced as the mukadam often provides a wage advance to the migrants. According to the NCRL (National Commission of Rural Labour), there were approximately 10 million seasonal/circular migrants in the rural areas alone in 1999-2000. This includes an estimated 4.5 million inter-state migrants. There were large numbers of migrants in agriculture and plantations, brick kilns, quarries, construction sites and fish processing.

Theory and impact of migration

While migration enables workers from underdeveloped regions to find employment, its impacts have been evaluated variably by academics. Todaro’s neo-classical model regards migration as a product of rational economic decision-making. The migrant makes a rational free choice to improve his economic condition by seeking more favourable employment conditions, even if the decision is being taken under distress. The policy recommendations of this theory are therefore in favour of migration and suggest reducing the cost of migration, i.e. improve the bargaining power of migrants, improve information and conditions of work, etc.

In contrast, the structuralist theories view the personal choice to migrate not at a product of individual freedom but rather as structured by the larger mechanisms of capitalistic production. In case of the poor, their choice to migrate is often the only option that they possess for survival, and their decision is a reflection of lack of choice rather than freedom of opportunity. Breman views the creation of migrant ‘wage hunters’ as representative symptoms of the larger processes of global capitalistic development resulting in a race to the bottom. Given that capitalistic production is motivated by profit as the only determining factor, it would invariably lead to regional imbalances and employers would hire labour at the lowest available cost.

Also, the reality of migrants at a micro-level ensures that their constant motion and inherent insecurity of employment reduces their ability and inclination to unionise or enhance their bargaining positions for fear of instant dismissal. The policy recommendations of this group of academics would therefore be in favour of strict implementation of programs to reduce regional development imbalances, minimum wage regulation and right to work, for example, employment assurance schemes like the Maharashtra Employment Guarantee Scheme (EGS).

Maharashtra’s Employment Guarantee Scheme (EGS): Right to Work Maharashtra Employment Guarantee Scheme was launched in 1972 and aims to provide unskilled manual employment on demand for wage labourers. The program innovatively draws its corpus of funds, which is funded up to 90 percent, by imposing a tax on white-collar professionals and traders in the cities, especially Bombay, and imposing an additional Motor Vehicle and Sales tax. These funds are used to create labour intensive public works, for example, digging wells, building roads, etc. Employment is guaranteed in the vicinity of the village or the transport cost to the place of work is reimbursed. The major objective of this self-targeting scheme is to create additional wage employment for emergency relief during natural calamities, provide food security and employment guarantee in cases of chronic poverty, and construct village infrastructure concurrently. Since this employment provides only minimum wage and is pegged at below the prevailing market wage, the program is self-targeting and draws only the poor and unemployed. Consequently, it also targets poverty alleviation, as it is directed at the most vulnerable populace. The strategy is similar to the conceptualisation of the Keynesian multiplier, which encouraged the use of large-scale public works to reduce unemployment and revive the economy during the Great Depression. His logic was simple – in times of distress it is the responsibility of the government to engage labour even if only to dig and fill trenches as long as it provides a means to circulate money, increase effective demand in the economy, and feed hungry stomachs. In the eighties in India, non-agricultural employment in public works, sustained by the large increases in government expenditure, influenced an increase in agricultural wages. Thus landless labourers, the poorest segments in the Indian rural population, were not only able to access gainful employment at the minimum wages in the public-works programs but also their seasonal wages in agriculture saw a much-needed increase. However in recent decades the EGS itself has witnessed deterioration due to use of funds for other purposes, corruption, competition between different poverty alleviation programs, insufficient unskilled work opportunities in rural areas, mismanagement, and decreasing demand for unskilled work as education levels increase.

Irrespective of ideological interpretations of the phenomenon of migration, it is an urgent crisis for the Indian state. The alarming call of political parties to curb migration on ethnic lines is a by-product of the economic distress facing the nation. Hence it is imperative to implement policy options to alleviate the situation for the short and long term.

Conclusion

This article presented an evaluation of the prevalence of migration in India as the root cause of ethic tensions vitiated by economic distress at low level of skill and education. The problem of unemployment is in urgent need of redressal in India. The implications of its unchecked fury were evident in the ethnic violence in Assam. The phenomenon of low productivity due to overcrowding and cyclical unemployment have important implications for future generations in terms of education as it affects their labour market options to a improve their skills and vertical mobility. Therefore it is imperative to protect the right to work in the second most populous nation on the planet.

Today, the nation is facing the daunting challenge of unemployment. With restructuring, even formal sector jobs have been shed. While employment options abound for the core circle of skilled professionals, the periphery of the unskilled and semi-skilled is worsening. Universalisation of programs like the EGS would provide an important measure of relief and long-term growth for the rural economy. However, it must be noted that a decade from now, the problem that the nation will face is educational unemployment for which the Assam incident serves as an ugly precursor. In fact, with the expansion of rural education, 8 million children have been taken off the fields in the last decade to join the rural schooling system. The aspirations of these first-generation literates require the construction of creative strategies for mass semi-skilled employment in the near future.