Monday, January 30, 2023

The Second Coming

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The return of migrants to cities will be a welcome sign of economic revival. But states should be proactive in giving them decent working conditions, safe housing and job security.

By Rahul Suresh Sapkal

WITH the outbreak of Covid-19, economic activities abruptly came to a standstill. The magnitude of the impact has had a multiplier effect as it was accompanied by a complete social and economic shutdown.

The lockdown also sparked a catastrophic reverse migration crisis, the economic effects of which will be felt in the coming months. Millions of workers lost their jobs immediately, a majority were stranded in slums and there was an exodus as thousands took to the streets to return to their villages. In this horrific situation, 667 people lost their lives by the end of the fourth phase of the lockdown. And their plight is beyond imagination.

By the time millions of migrants returned to their villages, they found no job opportunities and the employment opportunities offered to them under MGNREGA were inadequate and underpaid. The government is assuring them secured jobs and announced some “freebies” which may lure a large num­ber of low-skilled workers to stay back in their homes, but it will be a difficult task to retain semi- and high-skilled workforces.

As a result, towards the end of the fourth phase of the lockdown, states such as Punjab, Karnataka, Maharashtra, Haryana and Telangana (both at the private and public levels) are putting in efforts to bring migrant workers back from their home states of UP, Bihar, Jharkhand, Odisha, Rajasthan and Madhya Pradesh. So what are the challenges of this reverse migration?

Around the world, the history of migration is the history of the struggle to survive and prosper, breaking the vicious cycle of insecurity and poverty to raise the standard of living. In the words of noted economist JK Gal­braith, migration is the oldest action against poverty. Not only does unfettered worker mobility bring in prosperity, it also accelerates the pace of economic development. Labour migration is a convoluted process of uneven economic development, deprivation and structural exclusion. At the destination, migration affects markets by lowering the cost of labour, but at the source, it acts as a safety valve for the poor.

In the classical Harris-Todaro dual economy model, the process of migration from rural to urban areas is largely driven by the expectation of higher urban wages relative to rural wages, keeping the marginal product (i.e. income from additional effort) of the agriculture sector constant. According to this model, workers keep migrating to urban areas as long as the wage gap between rural and urban is high. This model assumes that the agriculture sector is perfectly competitive, workers self-select into the farm jobs and unemployment is non-existence. This model provides us with an overview of structural transformation through a dynamic process of migration from surplus to deficit sector, implying a migration equilibrium where­in urban and rural income become equal. The coexistence of traditional (rural) and modern (urban) sectors renders efficient outcomes. Application of this theory in the context of India provides different results.

The process of migration in India is driven by distressed economic conditions, pushing workers to go in search of better jobs. Moreover, the decline in the marginal product in the agriculture sector, persistence of the agrarian crisis and disappearance of sustainable livelihood aggravate the economic hardship of workers. This model adduces excessive reliance on the behaviour of economic agents of the modern sector, expected to absorb labour while accumulating capital. What we see, instead, is the coexistence of rapid capital accumulation and tepid growth in standard employment in the modern sector. This implies externalising the cost of development onto workers. Migrant workers pay both entry and exit costs when they decide to migrate to urban areas.

As part of the entry cost, migrant workers accept jobs which are hazardous, risky and low-paid with adverse working conditions and they continue to work until it fulfils their basic necessities. The precarious conditions of mig­rant workers have already been documented in existing literature.

However, for the exit costs, they are compelled to accept work conditions without any social safety nets. Looking at the build-up of migrants from rural areas to urban centres, it will be an understatement to conclude that their flow had no impact on the functioning of urban workplaces. The drive provided a reserve army of cheap labour waiting to be hired at wages which could dip lower than the statutory minimum, especially after meeting the commission due to the contractor. Nor was there any further obligation on the part of the employers, given that the “footloose” migrants never had any legal status. Will the growing demand in the post-lockdown phase address this issue?

On June 19, the railway ministry released special trains from migrant-rich states like Bihar, Uttar Pradesh and West Bengal towards cities like Mumbai, Ahmedabad and Bengaluru. They are scheduled to run at 100 percent occupancy over the next month. These three states together accounted for 81 percent of the 4,594 Shramik Special trains that were operated since May 1. However, within a period of 20 days, these workers are now returning to urban cities.

Many scholars observe that this reverse migration could be seen as a good sign of economic revival. In the beginning, the workers may enjoy higher wages, especially in those sectors where the costs of capital deployment are higher than labour costs and the employer can’t wait any longer. How­ever, there is no assurance that these vulnerable migrants will be given decent working conditions without proactive State intervention.

Secondly, the lack of retention of workers by source states also reflects uneven economic development, deprivation and structural exclusion that exist there. This indicates the need to accelerate the pace of labour-intensive sectors.

Thirdly, the emerging reverse migration trend is providing an opportune step in the time of the pandemic—specifically, to further strike a balance between capital and labour and promote an inclusive labour market that is more resilient.

Finally, the inevitable need to have migrants and an informal sector have made us realise that economic development cannot be possible in labour-in­tensive sectors. Hence, it is important for us to appreciate their contribution and establish protocols to support their growth potential by offering safe housing, job security, good health and well-being without any prejudice or exclusionary practices.

—The writer is Assistant Professor, School of Management and Labour Studies, Tata Institute of Social Sciences, Mumbai

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