Budget 2018: Focus on job creation, quantity at the cost of quality
Plagued by inadequate growth in jobs over the last several years, the finance minister’s focus for the last full budget before the next general election was on the creation of jobs. Apart from over Rs. 3,200 crores as credit support to MSMEs, the government has undertaken to contribute the employers’ share (12% of annual income) of EPF for every new worker for three years. It significantly reduces the payroll cost for companies to expand their workforce. The government has also reduced women employees’ contribution to EPF from 12% to 8% in order to increase their take-home pay. Though not part of the budget, the finance minister also emphasised the commitment of the government to expand ‘fixed-term contracts’ across all sectors.
“It persists with a short-term strategy of providing payroll tax sops and that too for just three years and encouraging fixed-term employment contracts. This is myopic as this will just create “numbers” and not sustainable jobs and inclusive labour market strategy,” K.R. Shyam Sundar, a labour economist and professor of XLRI Jamshedpur, told livemint. “Nor is there much to incentivise private sector investment,” he added.
It’s also important to note the 4% reduction of women workers’ contribution to EPF is not being compensated. This effectively decreases long-term savings to improve ‘take home’ wage. The proposal to pay the employer’s contribution of EPF for all new workers will amount to a significant transfer of wealth from taxpayers to corporates. Given that the support is only for the first three years, it is unclear if the jobs will remain viable when the subsidy is repealed. Along with the push for fixed-term contracts that institutionalise contractualisation of work, the measures increase precariousness in the employment market. While it might add jobs, the quality of these jobs would be poor.
Is it a sleight of hand?
While the finance minister announced exemptions and incentives to the salaried workers and agricultural producers, the details reveal that these provide only marginal gains. While the budget proposes an increase of the minimum support price (MSP) to 150% of the cost of production, a Firstpost article reveals that by taking a lower formula to arrive at production cost, the MSP in most states will be lower than the total cost of production. The article calls this a ‘sleight of hand’ by the minister.
Similarly, while the government has reintroduced standard deduction for salaried workers after many years, the standard deduction of Rs.40,000 will be compensated by the elimination of travel allowance and medical reimbursement (together close to Rs.34,000) providing only marginal relief of about Rs.6,000 to salaried employees. The increase of the education cess from 3% to 4% further cuts into the tax reliefs.
Trade unions’ response
The measures to curtail EPF and push for ‘fixed term’ contracts have come under serious criticism from trade unions, including the RSS affiliated Bharatiya Mazdoor Sangh, that has called for protests.
The Centre of Indian Trade Unions (CITU) has called this budget ‘disappointing’ for failing to address the corporate ‘tax theft’ or take efforts to recover unpaid debts from the corporate sector. It flags the failure of the government to ensure Rs. 18,000 as a floor minimum wage. The statement is silent on other issues such as minimum support price fixation in contravention of the MS Swaminathan committee recommendations and fixed-term contractualisation of work.
The New Trade Union Initiative (NTUI) has also released their assessment of the budget indicating it to be empty slogans to agricultural and industrial workers.
Port workers in Mangalore demand shipping companies implement labour laws
The majority of the workers at the New Mangalore Port Trust (NMPT) are not employed directly by the port but rather through shipping companies, clearing and forwarding agents, etc. These workers, led by the All India Port Workers Federation, have been on an indefinite strike since January 29 trying to pressurise the Port Trust to regulate their employers better and guarantee them better working conditions. However, the Newsclick article doesn’t have much detail on the precise nature of the labour law violations. This action by the port workers is a good example of how logistics clusters are becoming ideal sites of strikes to put pressure on exploitative systems as discussed in an earlier edition of this newsletter.
Mid-day meal workers in Telangana on strike
Mid-day meal workers at Laxmidevipalli conducted a protest outside the kitchen of a Bangalore-based NGO that has been contracted to provide meals to schools in the Kothagudem area. There are about 2000 workers employed as cooks who might be affected. While this a pilot, for now, many say that it is a part of the larger move to privatise the mid-day meal scheme. There have been reports from Karnataka, Assam and Andhra Pradesh over the last few years about how these workers have lost their jobs to NGOs with centralised kitchens. Most of these workers are women, many of whom are the sole bread-earning members of their families. It is this threat of large-scale unemployment that is behind the huge outpouring of support for the national ‘scheme’ workers’ protests which included a large number of Mid-day meal workers.
Workers at Bajaj Auto on hunger strike
Workers at two factories of Bajaj Auto at Akurdi Chakan have gone on an indefinite hunger strike since January 29 demanding that victimised workers be reinstated after revoking dismissals and a wage agreement that is pending since August 2016 be signed at the earliest. Bajaj Auto has claimed that in spite of the strike action, production has remained normal. The Chakan plants have over 1000 permanent workers.
Strike at Sanmina SCI ends with partial gains for workers
The 66-day strike at Sanmina SCI, an American medical equipment manufacturing factory in Oragadam, Chennai, came to an end after a mutual agreement was reached between the AICCTU led union and the management. The company has agreed to increase wages to Rs. 3,570 while revoking the suspension of 85 workers, imposed after they attempted to form a union. The workers staged a successful strike for over two months while also placing increasing pressure on the state government by blockading the Tamil Nadu labour department and even the American Consulate office. With a tripartite agreement being reached on January 24, the workers went back to work on the 25th.
Third Torex Gold striker murdered in Mexico
Over the last few months, we’ve repeatedly mentioned the ongoing NAFTA negotiations in North America where Mexican labour rights have been a central issue. Canada (partially to protect its own workers) has been fighting the cause of Mexican workers. Last week, the third labour activist died due to the ongoing strike against Torex Gold, a mining company. Newswire.ca reports that “According to the National Union of Mine, Metal, Steel and Allied Workers of the Mexican Republic (Los Mineros), last week labour activist Quintin Salgado was on his way to meet strikers from Torex Gold's Media Luna mine when he was intercepted and pulled from his vehicle. Salgado was beaten, his cell phone was destroyed and he was threatened with further violence if he kept advocating for a change of unions and a new contract. Yesterday, that threat was realised when Salgado was brutally murdered.” The strike has been going on since November as the workers want the freedom to leave the ‘management-backed’ union that they say has sold them out completely.
Algeria: Global unions condemn detention of 1,000 protestors
In Algeria, one of IndustriALL’s affiliates, SNATEGS, has been fighting a long battle for the workers of the state-owned oil and gas company, Sonelgaz. The union claims that the company has been overcharging consumers and ‘killing’ workers. The whistle-blowing about the inflation of fees has seen the union president slapped with cases and fines. Meanwhile, the union claims three workers die every month at the company because of the poor health and safety standards. On January 20, the union tried to organise a rally in Algiers, the capital city. It claims that 30,000 people tried to attend but were blocked by 10,000 police officers. 1,000 protestors were allegedly carted off by the police and denied food and water for ten hours. A number of global unions including IndustriALL and ITUC have strongly criticised the ‘anti-worker tactics and oppression’ by the Algerian government.
Teachers gather in Beijing to demand pensions
Due to the shortage of fully qualified teachers, China began recruiting ‘community teachers’ for its rural schools in 1986. These teachers were, not surprisingly, poorly paid, and weren’t eligible to receive the benefits of their more formally employed counterparts in the cities. On January 29, hundreds of teachers gathered to make several demands, including “re-employment for community teachers who had been laid off before reaching the statutory retirement age, payment of fully entitled pensions and exemption of contributions for those who are legally retired, and compensation for the families of those who had already passed away.”
Amazon patents wristbands that are meant to ‘save time’ as well as track workers’ movements
“The proposed wristbands would use ultrasonic tracking to identify the precise location of a worker’s hands as they retrieve items. One of the patents outlines a haptic feedback system that would vibrate against the wearer’s skin to point their hand in the right direction.” Read more here.
The Kupuna Caregivers Assistance Act, 2017
Going into effect this year in Hawaii is a programme to “aid, not replace, the cadre of family caregivers who provide millions of hours of unpaid care each year to older adults in Hawaii.” It offers a stipend of $70 to those who work 30 hours a week as well as have older family members to take care of at home.
‘Tiny Houses, Narrow Visions
In Tucson, Arizona, one school district announced plans to build ‘tiny homes’ for its teachers in a bid to retain them. This is a district in which “starting salaries for Arizona teachers are $36,000 a year, while the median income in the district is $83,000, and the median home price is $260,000” with no apartment buildings in the region. Nick Juravich places this announcement in historical context, offering critiques centred around income inequality as well as segregationist housing.
‘Poems of Protest, Resistance, and Empowerment’: Poetry Foundation’s curation of powerful, political poems can be accessed here.