Headed by Prime Minister Narendra Modi, as of May 2014, the right-wing government has been in talks of increasing jobs by restricting workers’ rights. The government has categorically stated that, in the past, too much protection was given to workers in the formal sector. Subsequently, this is the main hurdle for expanding employment. If job protection is removed, job creation (it was argued) will peak when the employers have the power of hiring and firing. In keeping with its objectives, the government has decided to amend and amalgamate the existing laws that provide protection to labour. The Factories Act has been redefined to exclude all manufacturing units that employ less than 40 workers. In other words, nearly 75% of factories in the country will be exempted from regulating working conditions. Similarly four acts relating to wages and bonuses have been merged in one code. However the approval of parliament will be required before they become laws.
It is often argued that social protection is not affordable or that government expenditure cuts are inevitable during adjustment periods. But there are alternatives, even in the poorest countries.
The paper "Fiscal Space for Social Protection: Options to Expand Social Investments in 187 Countries", published by the ILO Social Protection Department, offers an array of options that can be explored to expand fiscal space and generate resources for social investments. These include: (i) re-allocating public expenditures; (ii) increasing tax revenues; (iii) expanding social security coverage and contributory revenues; (iv) lobbying for aid and transfers; (v) eliminating illicit financial flows; (vi) using fiscal and foreign exchange reserves; (vii) borrowing or restructuring existing debt and; (viii) adopting a more accommodative macroeconomic framework. To serve as a general advocacy resource, Annex 1 of the paper provides a summary of the latest fiscal space indicators for 187 countries.
The potential for private or non-state regulation to improve labour standards has been much canvassed in recent years. It has been argued that working conditions in developing economies can be upgraded by making supply or investment contracts conditional on labour standards compliance. Alternatively, this can be achieved by offering access to premium price markets through product labels that certify the successful completion of a social auditing process. Nevertheless, it remains in dispute whether this kind of private regulation is effective from the perspective of workers. Existing research has found that while firms are often prepared to make modest improvements to pay for working conditions in pursuit of some market advantage, they remain unwilling to accept any significant increase in the capacity of workers to influence management decisions about employment conditions and the organisation of work. The research we report here confirms that as long as private regulators do not see it as their role to address the power imbalance between workers and employers, they will have little durable impact on labour standards.
The crisis which started in the United States in 2007 has turned into a global depression whose consequences are wreaking havoc across the world, although affecting in a disproportionate manner the 99 per cent, people who depend on their labour or state transfers to live. While banks and large companies have been bailed out (a remarkable sign that state intervention is alive and well in the neoliberal era) it is the majority who are now paying the bill in the form of spending cuts. Such cuts have direct social and economic effects: on the one hand, they make life more difficult for the poor; on the other hand, they undermine investment and economic recovery, delaying desperately needed job creation. As shown by David Stuckler and Sanjay Basu (2013) in their work on austerity policies’ impact on health, austerity kills, not just growth, but people.
The crisis has shown the limits of the neoliberal model of accumulation and of its theoretical or ideological foundation, the neoclassical belief in the self-regulating ability of ‘free’ markets. This is nothing new though, as many economists outside of the hegemonic tradition had been arguing since the 1980s that neoliberal capitalism does not only increase inequality, but generates disequilibria which threaten the possibility of sustained growth. There is however, in Europe and North America, a rampant sense of powerlessness in the face of the crisis. This is because, in spite of the rise of numerous movements of contestation of neoliberal policies, from Occupy to the Indignados, the only cure which politicians are implementing to respond to the ills of neoliberalism entail more of the same.
It is a fact that technological innovations and changes in the organization of work have caused alterations in the labour market, making certain international labour standards obsolete and, at the same time, giving rise to demands for new rights. However, this does not justify the pressure that the International Labour Organization (ILO) has been put under to reduce its character as an International Organization (IO) to that of an agency of the United Nations system, nor indeed the questioning about whether the right to strike is part of Convention 87, on freedom of association, although the ILO has been fostering this concept for more than sixty years now.
The ILO is one of the oldest and most important organizations in the UN system. It is also the only one to be run on a tripartite basis – governments, employers and workers. It has standard-setting and supervisory powers, as well as mechanisms for annulling obsolete standards, for updating incomplete standards and for enabling member countries to denounce Conventions that they consider unsuitable. So the instruments for perfecting the standards system do exist.