It’ll Take More Than $4 a Day to Improve Life for India’s Workers

India's Labor

Employees sit round a colleague using a cutting torch at an Ishwar Engineering Co. factory in Mumbai, Maharashtra, India.

Photographer: Dhiraj Singh/Bloomberg

Prime Minister Narendra Modi’s new deal to boost the economy has a simple logic: Cheap labor lures companies from high cost nations, and new jobs will improve the lives of millions of poor villagers. The ground reality shows how difficult the task will be.

At Alang, the world’s biggest shipbreaking yard in western India’s Gujarat state, workers earn about $4 daily standing in 100 degrees Fahrenheit heat for 12 hours to cut vessels. Migrants from the heartland’s poorest states, the laborers are often unaware of their rights, but very aware of their risks -- death, which often eliminates a family’s sole bread winner.

India’s labor laws cover only a small percentage of the workforce, and its social safety net is far behind China’s, where migrant workers’ lives have gotten better by making Nike Inc. shoes and Apple Inc. iPads. Policies of Modi -- completing his first year in power -- risk enriching tycoons while failing to improve the lives of the one in four Indians who live on less than $1.25 per day, labor activists say.

“If you want to make India a powerful manufacturing base, you must simultaneously improve the conditions of labor,” said Colin Gonsalves, founder of Human Rights Law Network, who has argued labor cases frequently before India’s Supreme Court. “Chinese conditions of labor are far, far better than India. China doesn’t allow people to treat Chinese laborers like slaves, like bonded laborers.”

“Make in India"

After coming to power last May armed with the biggest election mandate in three decades, Modi unveiled his ‘‘Make in India’’ campaign, which aims to boost manufacturing to 25 percent of the gross domestic product by 2022 from 18 percent now. The cornerstone of that policy is to attract companies to set up factories within India for manufacturing.

Modi so far has sought to have the best of both worlds: Make it easier for companies to navigate India’s complex labor laws without sacrificing protections for workers. He’s moved to allow more overtime and reduce factory inspections while also giving the poor life insurance and pension plans.

‘‘You can make international products only if your labor is protected according to international standards,” Gonsalves said. “It’s a myth that when you have low labor cost, there’s greater productivity and profits.”

Indian states with business-friendly policies will attract the largest portions of the $100 billion of international investment promised for the country, Modi said in October. India fell to 134 of 189 economies in the World Bank’s Ease of Doing Business index, from 131 in 2013.

India Vs China

Training is being given so that they can be more skilled and earn more, said Alkesh Tyagi, a New Delhi-based spokeswoman for India’s labor ministry, declining to comment on a comparison with China.

“We are not here to compare, we are here to improve conditions,” she said. “It’s going to improve. It takes time. When a country is as huge as India, things tend to take time to be visible.”

China has had a headstart over India in workers’ reforms with strict laws and protection for workers, helping labor become the backbone of the economy. That in turn has also lifted their livelihoods.

The economic boom over the past decade has made China’s migrant workers better educated, more expensive and also older. A migrant worker’s average monthly income rose 9.8 percent from a year earlier to 2,864 yuan ($461) in 2014.

Foxconn Suicides

Even so, China and companies operating there have had to deal with labor issues. In a country without formal labor unions, 8,000 Chinese teachers went on a strike demanding higher pay last year. In 2010, Apple’s contract manufacturer Foxconn Technology Group was rocked by a series of suicides at its facilities.

There are few sympathizers for laborers in India. Policeman P.K. Garchar in Modi’s home state of Gujarat is one example.

Among Garchar’s jobs is to investigate any labor disputes at Alang, which employs a total of 30,000 workers engaged in jobs ranging from cutting the hull of a ship to selling porcelain plates taken from disused vessels’ pantry.

The working environment at Alang’s yards are harsh. Workers toil in beaches filled with dirty oil, burnt cushions and wooden debris bobbing in the blackened sea waters of the coast.

The $2 billion industry suffered after the European Union in 2012 banned ships registered in its 28 member nations from using dangerous tidal beaches like Alang for demolition work. Shortly after taking office last year, Modi halved the import duty on ships brought in to be demolished to spur the business.

Deadly Beaches

The job is among India’s deadliest: 460 workers have been killed in the past two decades, Gujarat government data obtained by Shipbreaking Platform showed. The Brussels-based advocacy group estimates that actual numbers are much higher.

That evokes little sympathy from Garchar. Yard owners can’t be held accountable for deaths and accidents, he said.

“If I own a car and give it to my driver, and he gets in an accident, who’s fault is it?” Garchar said. “Irresponsible driving is the driver’s fault, not the owner’s.”

Employees at the yards are rarely aware of their rights and embark on tasks often considered too risky in the West. One such worker is Dinesh, who earns about 10,000 rupees ($156) a month driving an open truck full of gas cylinders needed to break ships.

“I do this every day,” he said. “Nobody told me that I need to follow any safety norm, neither do I see any need for it. Ultimately, I am in the front of the truck driving, and the cylinders are in the back,” Dinesh said as he sipped a cup of tea during a break at the yards that demolish old ships.

“You are Dead"

That mentality permeates across India. More than 90 percent of India’s workforce is unorganized and are without social security and welfare, according to a 2014 report by the government’s Labour Bureau. A 2008 law didn’t ensure security and physical safety of migrant laborers, neither did it explain what the government means by social security, the report said.

‘‘What is needed are humane laws and mechanism for their enforcement,” said Sharit Bhowmik, a national fellow at Indian Council of Social Science Research, “These workers are vulnerable as they are migrants who are driven to these areas due to poverty and lack on gainful employment at their places of origin. They occupy an underdog position.”

About 80 percent of the country’s 1.2 billion people have no health coverage, according to the International Labor Organization. India provides some of the fewest unemployment benefits of any country and workers are mostly unaware of the risks they take while earning their low wages.

Nand Kishore in another example. As a welder who cuts plates out of used ships, he spends almost 12 hours daily standing in hot conditions to tear heavy-duty steel.

“One moment of a lapse in concentration, and you are dead,” he says.

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