Two key assumptions need to be challenged.
First, that labor is dictating terms to industry. To some extent, that may once have been true of organised unionized labor. But now, the organised industrial sector contracts out much of its work to the informal sector, and those millions of workers are in no position to insist on any rights or protection. These are among the myriad migrant workers who are still trying to walk home.
The government’s own Economic Survey (2018-19) points out that one in every three wage workers in India is not protected by the minimum wage law. And now existing protections are being circumvented.
between April 14 and 26, only about six per cent had received their full wages during the lockdown, and about 16 per cent had been partially paid. Hardly a sign of labour dictating terms.
The second assumption that needs to be challenged is that is diluting core labour standards will help India tap its demographic advantage.
Important reasons for the region’s success in attracting FDI were factors like maintaining competitiveness through superior technology, high levels of human capital, skilled labour force, agglomeration effects, dynamic growth and the role played by the state in strategically allocating FDI in the right sectors
The bottom line: complying with core labour standards does not hinder competitiveness of either a single industrialist or the entire country. Profitability and complying with basic labour standards go hand in hand. Sick workers lead to a sick industrial unit and an unhealthy economy.
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