Academic journal article Indian Journal of Industrial Relations

Legal Reforms for the Self-Employed: Three Urban Cases

Academic journal article Indian Journal of Industrial Relations

Legal Reforms for the Self-Employed: Three Urban Cases

Article excerpt

Introduction

The need to balance job creation with basic protection for workers--to make economic growth inclusive--is a major challenge for the early 21st century. In India, as in most countries, labor laws rest on the assumption of a clear employer-employee relationship, and commercial laws rest on the assumption of incorporated enterprises with documented accounts. But eighty per cent of the urban workforce in India is informal, and half of urban informal workers are self-employed (Chen & Raveendran, 2011, updated 2014). The mismatch between the existing legal frameworks around employment and the existing employment structure creates a major challenge for policy makers and calls for significant legal reform.

At the beginning of the 21st century, employment grew at a faster rate per year in urban India than in rural India (Chandrasekhar & Ghosh, 2007). As of 2004-05, over half (54%) of the urban working age (15+) population was in the labor force, either actively working or actively seeking work: 79 percent of men and 24 per cent of women (ibid). But since 2004-05, there has been a marked slowdown in employment growth in both rural and urban India. By 2011-12, just under half (49%) of the urban working age population was in the labor force: 76 per cent of men and 21 per cent of women (Chen & Raveendran, 2011, updated 2014). This slowdown in employment growth was accompanied by a decline in self-employment, which had been growing. By 2011-12, the shares of self-employment and wage employment in total urban employment had reverted to their 1999-00 levels: at 42 and 58 per cent, respectively (ibid).

However, the urban informal workforce was almost evenly divided between self-employment (51%) and wage employment (49%) in 2011-12. There are three main categories of the self-employed: employers (who hire others), own account workers (who run single person or family enterprises without hired workers), and unpaid contributing family workers. In 2011-12, 38 per cent of the urban informal workforce (39% of men and 31 % of women) were own account workers; 11 per cent (8% of men and 20% of women) were unpaid contributing family workers; and only 3 per cent of men and 0.5 per cent of women were employers (ibid).

This article examines what laws and regulations impinge on--and what legal reforms are needed for--three groups of informal self-employed in urban India: home-based workers, street vendors and waste pickers. In 2011-12, these three groups combined represented one-fifth of the total urban workforce in India: home-based workers (15%), street vendors (4%) and waste pickers (1%). Home-based work was particularly significant for women: representing almost a third (32%) of the female urban workforce. The article describes the conditions of employment and work processes of these three groups, and introduces key organizations of these workers in India. It then examines the legal demands of these organizations of workers. Finally it draws out some lessons for legal reforms for the self-employed in India and elsewhere. This article draws on findings and recommendations from three multi-country initiatives led by the global network WIEGO (Women in Informal Employment: Globalizing and Organizing): an on-going program to improve official national statistics on informal employment around the world; a 2012 study of urban informal workers in 10 cities/9 countries (including waste pickers in Pune and home-based workers plus street vendors in Ahmedabad); and a multi-year project on law and informality in four countries (Ghana, India, Peru and Thailand). Many of the sector-specific findings, as well as recommendations of the 10-city study and the 4-country project, are common across the different cities and countries. In other words, what is detailed below about legal reforms for home-based workers, street vendors and waste pickers is not unique to India.

Home-Based Workers

Home-based workers produce goods or services for the market from their own homes or adjacent grounds and premises: stitching garments and weaving textiles; making craft products; processing and preparing food items; assembling or packaging electronics, automobile parts, and pharmaceutical products; selling goods or providing services (laundry, haircutting, beautician services); or doing clerical or professional work, among other activities. …

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