This paper offers a revised theoretical model to understand the historical development of labor under capitalism. Drawing on Antonio Gramsci, Karl Polanyi, and Nancy Fraser, the revised model highlights how state politics and ideologies have reshaped formal and informal labor to fuel evolving accumulation models since the 1950s. It also deepens our analysis of the potential and limits of labor's contemporary countermovements. Potential advances must be read in terms of increased protection and increased recognition relative to earlier eras. Limits must be read relative to the hegemonic forces splintering workers’ countermovements. Applying the revised model to the empirical case of Indian informal workers in various sectors, I illustrate how the Indian state used informal workers as a political actor (not just an economic actor) to organize consent for a powerful new hegemonic project of market reforms (of the Gramscian variety) that undid labor's twentieth-century gains and empowered large businesses, but retained democratic legitimacy with the mass labor force. I also expose and evaluate two kinds of countermovements emerging from below by Indian workers: self-protection movements (of the Polanyian variety) and emancipatory/recognition movements (of the Fraserian variety). India's recent hegemonic project enabled informal workers to counteract the dehumanizing effects of labor commodification by offering an alternative labor protection model. This model has the potential to redefine the working class (and its protection) to include multiple employment relationships for the first time. It also promises to recognize the social relations between multiple categories of vulnerable populations, reminding us that caste, gender, and class are mutually constitutive (rather than mutually exclusive). But this model is highly constrained by contemporary hegemonic forces, highlighting the complex relationship of society to state—one of contestation and, for the sake of survival, collaboration.
Labor is a central ingredient in any country's economic and social development. Yet the scholarship on labor and that on development remain oddly siloed. Deep investigations of labor are often missing in the development literature, while the concept of “development,” and even the word itself, are rarely found in the scholarship on labor and labor movements. In some ways, our scholarship mirrors practice. Development institutions, especially since the 1980s, have tended to favor projects built around ascriptive characteristics (such as gender or indigeneity), life-span markers (such as children and the elderly), and issue areas (such as water, education, health, and governance). In the rare cases that development institutions directly address “labor,” projects often combine labor identities with another identity and strive to eradicate it (as in the case of “child labor”) or rechannel it outside the traditional industrial sphere (as in the case of microcredit programs and entrepreneurship training programs). Similarly, labor movements (not surprisingly) focus on attaining more rights, welfare, and improved working conditions for their members, and thus focus less on the overall development of a country or region.
In other ways, however, the divide between labor scholarship and development scholarship ignores the reality of practice. Development programs, often initiated by state plans and policies, directly shape labor. And labor movements, especially in the global South, constantly fight (sometimes successfully) to reshape state depictions of labor in the name of “development.” In the process, society's labor is developed in a constantly evolving pattern that is rife with exploitation, adaptation, and contestation.
It is time for our scholarship to catch up with this reality and not only acknowledge the deep connections between development and labor, but also articulate their details and analyze their historical trajectories. In this paper, I propose a revised theoretical model of labor, which I hope can help us better understand the contemporary development era in a historical context. I also hope a revised model can help push our scholarship (on labor and on development) past its current impasse, which too often dissolves into a divide between so-called pessimists and optimists, those who see the future as a glass half empty and those who see it as half full. The divide rears its head across study areas and countries. Some claim the divide is political (pessimists are revolutionary leftists, whereas optimists are reformists); others say it is generational and place-based (pessimists are older and from the global North, whereas optimists are younger and from the global South); still others say it is academic (pessimists claim to be more “theoretical,” while optimists are naive empiricists; optimists claim to be more scientific, while pessimists are ideological and divorced from reality). The highly charged and emotional nature of these debates is understandable in the current context, where the stakes are so high and the feeling is we may be on the verge of a systemic change. Nevertheless, these labels are not analytically useful, and these polarized debates take us nowhere in terms of transforming people's everyday miseries and making fewer people poor.
Moreover, underlying these polarized debates is a mis-theorization of labor in the contemporary era; hence my call for a revised theory of labor. This paper is framed by three questions:
How have development efforts shaped and reshaped labor from the 1950s to the present?
How can we retheorize labor in contemporary capitalism to include formal and informal labor?
What are the conditions for and constraints on contemporary countermovements by labor?
Let us begin by looking at the existing theoretical models guiding much of our thinking on labor and development today.
EXISTING FRAMES OF DEVELOPMENT ERAS AND LABOR: A LIMITED MODEL
In recent years, a rather familiar framework has emerged to depict how labor has evolved across development eras since the 1950s. As I detail below, this model is limited and in desperate need of revision.
The existing framework of capitalist development depicts three evolving regimes of capitalism. The first, often referred to as the Keynesian era, or “state-managed capitalism,” took place in the 1950s to the 1970s. The second, known as “market-based capitalism” or the neoliberal era, began in the 1980s. The third era began in the 2000s and is often referred to as “finance capitalism.” Within this broad and familiar sweep of evolving models of accumulation, labor relations are also depicted as changing over time. From the 1950s to the 1970s, or in the first era of postwar capitalism, formal labor in many countries had some structural power and was able to win some state-provided protections and regulations. But since the 1980s, the balance of power has shifted drastically away from labor and toward capital. Although this picture glosses over important country-level nuances, especially in terms of the sources of labor rights and the contours of social contracts in democratic versus authoritarian states, it has informed a near consensus about the contemporary era: market logics are taking over earlier social protection models; inequalities are increasing; and low-wage labor is losing out in terms of security, real wages, and reproductive rights.
That this picture begins in the 1950s reflects a dominant (but also contested) depiction of the development field in the global North as beginning with the end of the World Wars, the rise of the anticolonial movements throughout Asia and Africa, a new global economy governed by Bretton Woods, and a new bipolar world order dominated by a capitalist superpower (the United States) on one side and a communist superpower (the USSR) on the other. From the 1950s to the 1970s, scholars debated the reasons for and the solutions to development and underdevelopment. Modernization theorists highlighted the need for inputs (technology, political systems, and capital) and the power of specialization and global trade, banking on developing countries’ ability to “catch up” to developed countries given the right policies (Huntington 1968; Organski 1965; Rostow 1960). Dependency theorists, in contrast, highlighted the historical relations of exploitation under colonialism that had caused underdevelopment in the first place, and proposed “delinking” from global capitalist structures as the only solution for southern development (Cardoso 1972; Emmanuel 1974; Frank 1969).
In practice, however, during this period development officials often blurred the lines between the polarized scholarly camps. For example, many southern states, moved by dependency theorists’ emphasis on power relations, still took part in Bretton Woods negotiations and launched import-substituting industrialization schemes that relied on global trade for backward and forward linkages (Helleiner 2014; Hirschman 1968; Prashad 2007). From a labor perspective, there was also less polarization. Within a context of capitalist accumulation, many state officials and labor activists emphasized Fordist models of formally protected and regulated labor as an ideal, which in turn led to varying degrees of state-managed capitalism. Across capitalist and communist spaces, there was a belief that manufacturing and industrialization would absorb national labor, which in turn led to a shared developmental goal: to achieve the great “structural transition,” when the share of labor working in manufacturing exceeded that in agriculture (Lewis 1954).
The 1980s gave rise to a new development era across the world, widely referred to as “market-based capitalism” or neoliberalism. This era, in turn, unleashed a new set of heated scholarly debates around development (Hirschman 1981; Krueger 1990; Lal 1985; Sen 1983; Streeten 1987). For many countries crippled by the oil crisis of the 1970s, this era began with a humiliating turn to structural adjustment loans from the global North, which forced developing nations to alter their political economy structures. Rather than enabling strong, nationalist states to govern their economies, neoliberal policymakers advocated increased privatization, the liberalization of trade and finance regulations, and fiscal austerity in state expenditures. Faith in global trade as a vital step toward development remained strong (Stiglitz 2002). In other countries, most famously those in East Asia, states remained involved in managing industrial policy, but policies did change to foster export-oriented industrialization (Castells 1992; Johnson 1987). As in the previous era, regardless of where one stood in the political and scholarly debates, there was a shared emphasis on the development of exports, and manufacturing remained the most promising absorber of labor. Unlike in the previous era, however, Fordist accumulation had given way to “Toyotist accumulation,” which relied on decentralized production and less protected labor. With the fall of the Soviet empire came the eradication of a left-wing alternative, and the earlier consensus around the ideal of a formally employed, protected, and regulated labor force quickly began to wane.
Today, we read a lot about yet another era of development, which began in the late 1990s. People refer to this newest era with varying names, such as “finance capitalism” and “post-Fordist accumulation.” Some scholars depict this era as a mere repackaging of the previous era, designed to foster the same ideals while avoiding earlier criticisms (Evans and Sewell 2013; Harvey 2005). Others highlight important shades of difference. From the perspective of labor, in particular, people decry the contemporary era as more capital-intensive than ever before. Many economies, they claim, are experiencing capital deepening, or increasing organic composition of capital, through new technologies that are making labor less important, if not entirely redundant. Capital's dependence on labor, therefore, is said to be thinning, which in turn is fostering “jobless growth.” Scholars and policymakers are scrambling, therefore, to understand the long-term effects on the working poor of growing phenomena such as the “gig economy” and “roboticization.” There is little consensus on what sector will absorb the majority of the labor force. At the same time, and in some contradiction to fears of labor's redundancy, scholarship on the swelling mass of “informal” or “precarious” labor is rising. Capital's reliance on these workers is being increasingly acknowledged, but, unlike in previous eras, these workers are not regulated by state law (some are explicitly excluded from state regulation, while others are de facto excluded through lack of enforcement of the law). In essence, therefore, there appears to be a new class division emerging, not just between capital and labor but within labor, between formal and informal workers.
Although this broad sweep is useful, it is also limited in several important ways. First, it does not resonate well with all parts of the world. For example, in China, the most rapid growth in manufacturing took place in a context of reduced state protections for labor, rather than in the first era of heightened state protection (during which China valorized its agricultural, rather than industrial, sector). In South Korea, although the first era was characterized by state-managed industrialism and welfare provision and heralded by many as a development success story, it was framed by intense labor repression, not a social contract and compromise between the state and labor.
Second, and more relevant for several countries, the broad sweep tells us too little about the actors and the processes at work. What are the exact alliances and contradictions between the state, labor, and capital in each era? And what are the precise processes that enable a transition from one era to the next? Without a deep understanding of the actors and processes, we risk resorting to functionalist arguments that mask power hierarchies and ironically echo invisible-hand-type arguments to explain the progression of development over time. To address these flaws, I argue here that we must:
Theorize the precise role that precarity or informality has played in organizing capital and capitalism in these different eras over time. Informal labor did not simply emerge in the 2000s out of nowhere. We need to ask: Why is informal labor only now being acknowledged? Exactly how are the decades of advances made by organized formal labor now being undermined? Who is responsible for these changes?
Reinsert the state, politics, and ideology back into our analyses. How did these forces operate from above and below to make the transitions between regimes of capitalism possible?
By analyzing informal workers and state politics over time, we can shed greater light on the reality of workers’ lives and experiences, and the constraints they face—all of which are too often masked by shorthand nods to “finance capitalism,” “technological intensiveness,” and “jobless growth.” Examining informal workers’ historical relations with the state may also help move us past the polarized debates about labor's future prospects relative to an often romanticized past. Of course, the truth is that the glass is always both half empty and half full; the more interesting questions, therefore, lie somewhere within that thin line of division between the optimists and pessimists.
Let us now turn to addressing these questions to build a revised theoretical framework for contemporary labor.
REVISING OUR THEORETICAL FRAME: GRAMSCI, POLANYI, AND FRASER
To begin this endeavor, I first draw from an under-cited article by Michael Burawoy (2003) on the “complementary convergence” of Antonio Gramsci and Karl Polanyi to argue that to understand labor in the contemporary development context, we must intertwine the arguments of Gramsci and Polanyi. Many recent labor scholars have cited Polanyi to highlight various countermovements where labor fights the decommodification forces of marketization. These pieces form the crux of the debates on whether or not these movements are transformative or reformist. But since counter-resistance is necessarily a response to hegemony, each set of forces (hegemony and countermovements) must be evaluated in the context of the other. It is meaningless to argue that a particular countermovement is (or is not) transformative without understanding the particular hegemonic force it is up against. Therefore, we need a historical analysis to expose how different states variously use formal and informal workers in their hegemonic projects.
To further deepen our evaluation of labor's current countermovements, we must supplement Gramsci and Polanyi with Nancy Fraser's 2013 article, “A Triple Movement?” Fraser extends Polanyi's “double movement” (of marketization and self-protection) to include a third movement, which she calls emancipation. Emancipatory movements fight symbolic and cultural injustices and fight for recognition. They offer an important corrective to the broad historical sweep of development eras outlined earlier, reminding us of the exclusionary nature of past countermovements for “redistribution” or “self-protection,” not only along race and gender lines but also along class lines. After all, twentieth-century social contracts designed to protect labor excluded informal workers by definition.
Crucially, Fraser highlights the shifting relations among three sets of political forces, marketization, protection, and emancipation, whose projects intersect and collide. In principle, each can ally with a second against the third. In other words, protection and emancipation movements may ally against marketization forces, but other polarizations are just as likely: protection movements may form compromises with marketization forces at the expense of emancipation movements, as happened in the first era. And emancipation movements may form compromises with marketization forces at the expense of protection movements, as many argue is happening now with women's movements, caste movements, and race movements that do not address the material concerns of labor.
These theoretical insights help reframe our understanding of contemporary workers’ realities on the ground. For over a decade, I have analyzed Indian informal workers’ employment relations, relationship with the state, politics, movements, legal activism, intersectional identities, gender, migration experiences, histories, and transnational efforts. I have examined informal workers across diverse sectors, in tobacco manufacturing, automobile manufacturing, textile and garment manufacturing, construction, trash collection, and domestic work (Agarwala 2006, 2009, 2012, 2013, 2014, 2016, 2018, forthcoming a, forthcoming b; Agarwala and Saha 2018; Agarwala and Chun, forthcoming). Drawing on my work to date, alongside Burawoy's useful call to intertwine Gramsci and Polanyi, I argue here that the Indian state has used informal workers as a political actor (not just an economic actor) to organize public consent for a powerful new hegemonic project of market reforms that effectively undid labor's twentieth-century gains, empowered large businesses, and simultaneously retained democratic legitimacy with labor (formal and informal). Consent is organized ideologically and materially. Although some have argued that labor in the global South is always coerced, as workers are squeezed for their very survival, in India, labor has been organized through a regime of coerced consent.
By exposing new hegemonic forces (of the Gramscian variety) operating from above, we can then expose and evaluate budding countermovements (of the Polanyian variety) emerging from below. In India, the hegemonic project from above opened a door for informal workers to try to counteract the dehumanizing effects of the extreme commodification of labor under the reforms by offering an alternative labor protection model. Their efforts highlight the complex relationship of society to state (a mixture of collaboration and contestation).
Drawing from Fraser, however, we must also remember that informal workers are engaged in two types of countermovements—one for protection and one for emancipation. We need a historical analysis to show the different stages that each of these countermovements is currently at and the different alliances they pursue at different points in time. To return then to our debate between the pessimists and optimists, informal workers’ movements today do represent an advance. This advance must be read in terms of increased protection and increased recognition and emancipation relative to earlier eras. These improvements, however, are deeply constrained by a hegemonic force that is simultaneously working to splinter workers’ countermovements.
DEFINING INFORMALITY AND PRECARITY
Since the 1970s, scholars and practitioners have engaged in long debates in the global South on the definition of “informal” labor (Rakowski 1994). Recently, the debates have re- emerged in the global North, preferring the term “precarious.” The new literature has spurred some scholars to ask, are there substantive distinctions in these terms or are we just splitting hairs? From the perspective of India, where “informal” has been more widely used historically, the earlier definitional debates stemming from the global South are more useful, even today. At the same time, these earlier definitions are based on the social accumulation model of the first era of development (state-managed capitalism), so they need to be revisited to better accommodate the contemporary era of neoliberal finance capitalism.
In general, “precarity” refers to a continuum of criteria, including labor security, control, regulatory protection, and income (Cranford, Vosko, and Zukewich 2003; Rodgers 1989; Standing 2011). While this concept helps describe the range of precarious conditions found across regions, it disembeds the phenomenon from larger socioeconomic structures, so it gives us no insight into why precarity exists in the first place.
In contrast, the concept of “informality” has highlighted the social relationship of regulation between labor, capital, and the state. For example, Portes, Castells, and Benton (1989) defined informal workers as those who produce legal goods and services but operate outside labor, health, and financial regulation. Breman and Linden (2014) defined informal labor as a “type of waged employment thoroughly flexibilized and unregulated by public intervention” that features part-time, flexible jobs; low wages and decreased secondary benefits; more outsourcing and self-employment; irregular work days (lengthened and shortened); and relaxed controls on work conditions. To accommodate informal workers’ struggles for new protective regulations, I have offered a refined definition of informal workers as those not regulated or protected by the standard employment relationship (SER) that defines formal workers (Agarwala 2013). In doing so, I emphasize that informality does not imply that informal workers (those omitted from SER-defined regulations) are untouched by all state regulation. Clearly, states govern the enactment, redactment, and implementation of SER-based regulations, which draw arbitrary boundaries that distinguish subsets of workers, which in turn determine the level of protection they are entitled to. Also, informal workers are subject to a host of state regulations (coercive and protective) that are not marked by the SER and usually not classified as labor rights.
The regulation approach to informality refers to a fairly recent invention, stemming from the first half of the twentieth century, when most capitalist countries designed social contracts that protected labor within the confines of a legally recognized employer–employee relationship (Wright 2002). In most cases, these social contracts emerged from deep labor struggles; in some cases they also reflected state and capital interests in anticolonial struggles; in still other cases, they were the result of (often repressive) state-based developmental policies. Contracts also varied in how broadly they defined the SER. But in all cases, twentieth-century social contracts (and the SER-based regulations within) marked a break from the past, when all workers were technically informal, and regulations based on one's status in the SER were nonexistent. Indeed, the emergence of SER-based regulations largely defined the first era of state-managed capitalism in the development framework outlined above.
The twentieth-century social contract made huge contributions to protecting labor—at a material and rhetorical level. But they ultimately failed to cover all workers, because the SER was defined too narrowly. For example, in most countries, SERs never included work in the agricultural sphere. Moreover, in the non-agricultural sphere, employers could simply avoid regulation by hiding the SER in two ways. The first is by employing workers indirectly, through chains of middlemen. These workers, known as “contract workers,” are directly involved in capitalist production, but hired through subcontractors to avoid visibility, regulation, and protection. Employers can be small, unregulated enterprises or formally registered companies, such as Honda or Levi Strauss & Co. In some countries, contract workers have attained some rights. In other countries, “contract” workers are further segmented into those who receive a formal contract (and thus have a specified number of work days with job security and recognition) but are denied all non-wage benefits and other labor rights, and those who receive no contract and are denied wage and non-wage benefits, labor rights, and specified numbers of work days. In India, the first group have only recently been enumerated in government labor-force surveys; they are called “informal-regular” workers, reminding us of the normalization of informality today.
The second way non-agricultural employers hide the SER (and thus avoid labor regulation) is by relying on “self-employed” workers, that is, owners of small, unregistered businesses. Self-employed workers often sit in mixed class locations, with some access to capital (be it a sewing machine or a small shop) as well as interest in labor welfare (as they often work for themselves or hire unpaid family members). They usually operate outside labor regulation, the assumption being that one cannot exploit (or obtain protection from) oneself. Self-employed workers provide cheap inputs for capital production (such as auto parts, transport, and products manufactured on order) and goods and services to middle- and upper-class capital owners (such as cleaning, elderly care, gardening, and waste collection) as well as to low-wage workers (such as food, clothing, and haircuts). Capital might buy, sell, or even design inputs for self-employed workers. In contexts where contract workers are protected under law, employers avoid regulation by claiming they “buy” their finished products from a self-employed worker, rather than a hired contract worker, even if the product is ordered and designed by the employer. In these cases, self-employed workers resemble mislabeled contract workers.
Together, these two groups (contract workers and self-employed workers) make up the informal workforce. Given the boundaries of twentieth-century labor protections around the SER, both groups operate in nonstandard employment relationships and are thus outside labor legislation, with no employment contract, no non-wage benefits, and no legal rights to job security. Both groups operate in a diverse range of locations, including those not officially recognized as profit centers (such as their own homes, employers’ homes, unregistered worksheds, and the street), as well as recognized profit centers (such as a factory floor next to formal workers).
Despite these conditions of work, the labor of both groups is being profited from. Therefore, all informal workers form a class implicated in the social relationship between capital and labor. Informal workers’ labor is cheaper and more flexible than that of formal workers, so they are (in effect) subsidizing both capital and formal labor's benefits. By highlighting the social relationships between informal labor, capital, and formal labor, we expose how the informal and formal sectors are mutually constitutive, not mutually exclusive. We also expose why informal work does not go away with economic growth (as originally predicted by early development theories). Informal work is neither a remnant of the feudal past nor an outcome of the neoliberal present. Informal work has always been and will continue to be an essential part of modern capitalist growth.
It is for this reason that in many countries, the category “informal labor” refers only to non-agricultural workers (those in manufacturing, construction, and services). In substantive terms, this distinction is illogical; after all, agrarian labor is equally unprotected and unregulated, and many unions mobilize agricultural and non-agricultural workers. The decision to omit agricultural workers from the term “informal labor” reflects a political effort by non-agricultural informal workers to be viewed by the state in relation to non-agricultural formal workers. Since agricultural workers have never had a formal subset, so their argument goes, they need not be defined along an informal-vs.-formal axis. Non-agricultural work, in contrast, has long privileged a minority subset of formal workers, thereby excluding the majority of non-agricultural informal workers, who deserve more recognition and rights. By defining “informal workers” as non-agricultural, they have distinguished themselves from the so-called feudal, traditional labor of agricultural workers and instead linked themselves to the so-called productive labor of the modern sector.
In India, the distinction between agricultural and non-agricultural labor recently made headlines. In 2011, India had more workers in the non-agricultural sector (56.3%) than in the agricultural sector (NSS 2011) for the first time. But the characteristics of non-agricultural work have changed since the 1950s. For example, non-agricultural work now spans rural and urban regions, in contrast to 1951, when 71.9% of rural people were cultivators and 28.1% were (mostly landless) agricultural laborers (Ghose 2016). And contrary to scholars’ depiction of informal labor as “rural,” “traditional,” and “outside capitalism” (Sanyal 2007), the majority of India's non-agricultural labor is informally employed. Of these non-agricultural informal workers, self-employed workers are the largest subset, at 48%, and regular-informal workers are the fastest-growing subset. In other words, to the extent that employers are able to absorb the millions of surplus laborers in India, they are doing so through unprotected, unregulated jobs. More significantly, even when absolved of responsibility for their workers’ welfare, employers are unable to absorb an enormous share of these workers. To make up for the employment shortfall and to address the survival needs of India's poor, the Indian government (with the blessing of international development advisors) has offered loans, skills training, and placement programs to incentivize the poor to start their own small businesses as self-employed workers.
A key conundrum that arises from this definition of informality is that the twentieth-century social accumulation model that marked the first era of development is being questioned. As a result, the SER regulations that protect a narrow subset of workers and create a large mass of unprotected, excluded workers are unraveling in many countries. If present-day labor regulations are undone, and even the narrow subset of formal workers lose protections, the distinction between formal and informal workers will lose its meaning, catapulting us back to an earlier era, when all workers were informal—that is, unprotected. This scenario raises important questions as to how informal (and formal) workers are addressing the current onslaught on the (imperfect) twentieth-century regulations. Will workers try to expand existing regulations to include more workers, or overturn the model to ensure protection along non-employment-related lines, such as “citizenship” or other identities? To answer this question, we must first understand the hegemonic context within which workers are struggling.
INDIA'S HEGEMONIC PROJECT ON LABOR
In the rest of this article, I apply the revised theoretical model I outlined above to the case of India, starting with an analysis of the Indian state's hegemonic project from above, and following with some insights on Indian labor's self-protection and emancipation movements from below.1 I hope that future research can do this for all countries, so we can eventually build a global picture of the development of labor in a historical context.
Contrary to what we might expect in a liberalizing economy, the Indian government has not managed to pass any major reforms to its labor laws at the national level. Instead, since the 1990s, the Indian state has employed a powerful, subtle, two-pronged strategy to undermine formal labor by neutering existing laws (while retaining them on paper) and shifting the locus of the capital–labor battle outside the twentieth-century legislative framework. In the process, the Indian state has (1) undermined two central ideals of the Indian constitution, democracy and equality, and (2) managed to build a new hegemonic ideal that organizes consent and constricts class struggle among formal workers. This two-pronged strategy enabled the Indian state to shift the balance of power away from a protected labor class toward an empowered capitalist class (constricting class struggle), while still retaining its own democratic legitimacy through the promotion of informal workers (organizing consent).
Roots of the Indian Hegemonic Project
To understand India's contemporary hegemonic power, we need to follow its roots to two vulnerabilities in India's twentieth-century labor legislation, which the state adeptly capitalized on in the subsequent era. The Indian constitution contains a massive number of labor laws at the national and state levels. Even pro-labor activists have sometimes called for reduction and streamlining of these laws. While they reflect protections that were typical of twentieth-century social contracts globally, they also contain two unique, progressive features that ironically also facilitated the demise of labor protections in India.
The first is that at Independence in 1947, the Indian state was vested with an enormous amount of power in mediating capital–labor relations. India strove to build a mixed economy under a Fabian Socialist rubric where the private sector owned 70% of the assets but was tightly controlled by the state. This control over production translated easily to control over industrial relations. The Indian state's power far exceeded that of many other capitalist states, including the social-democratic states of Scandinavia, where the state has virtually no role in production or industrial relations. In India, labor enforcement officers (from national to district levels) run routine “checks” on factory floors. State and national tribunals and labor courts resolve capital–labor disputes. Workers are not free to choose the forum (civil courts or labor tribunals) to protect their contractual rights; only the state can make this decision. The government provides permission for firing workers and administers employment exchanges, vacancies, and applicants. As in many countries, the state also gives workers mandated benefits, a national network of hospitals and dispensaries, health benefits, and most pension funds.
Organized labor pushed for this exaggerated state role because it was viewed as a way to ensure that the state bears the social and political costs of mass retrenchment. In other words, it was a way to guarantee that the state had a democratic incentive to protect job security and job quality. The problem with this approach is that this power made labor vulnerable to state control in subsequent eras.
The second unique feature of Indian labor legislation that subsequently created an important vulnerability for labor is that the laws only applied to large employers. Labor pushed for this limitation because it recognized that small employers in a poor country could not afford labor protections. Underlying this pragmatic recognition was an assumption and faith that with modernization and growth, small employers would diminish and big capital would be held appropriately accountable for their labor. In the meantime, those working for small employers were unprotected, or informal, and denied access to any benefits associated with the SER. They were also excluded from labor policy, data, and organizations. The problem with this approach is that it created deep and long-standing resentment among informal workers toward formal workers.
Contours of the Contemporary Indian Hegemonic Project
Drawing on these two unique features of Indian labor regulations, the contemporary Indian state has (1) used its enormous state power in industrial relations to weaken the twentieth-century labor protection model, and (2) channeled the deep resentment that has formed among the excluded mass of informal workers toward formal workers to build an alternative labor model that meets business needs, undermines formal labor protections, and still retains state legitimacy.
To organize consent for this undermining of twentieth-century labor protections, the Indian state has reshaped the public debate on labor to vilify formally protected labor for hurting “vulnerable populations,” who are unable to get jobs due to excessive and costly regulations and protections. Indeed, the cry of “jobless growth” must be seen as a cry from the right and the left. To simultaneously retain its legitimacy with the mass electorate, however, the Indian state has strategically never overtly attacked labor protections of wages or benefits. It has only attacked labor protections that undermine labor flexibility (i.e., laws protecting contract labor and job security).2 The Indian state has shifted the debate to the “need for jobs” and away from “fair jobs.” In addition to shaping the national-level debate on labor, the government has capitalized on its federalist structure to sanction more drastic labor reforms at the state level in only some states (including Gujarat, Rajashtan, and Chattisgarh). By creating a few state-level exemptions, the central government is able to provide an outlet for business without losing mass legitimacy. The central government has also undermined labor enforcement by slashing budgets for the labor ministry, which now has much fewer labor enforcement officers. I have often been told by labor ministry officials, “We are no longer a labor ministry, we are a welfare ministry.”
However, undermining the fruits of formal labor's twentieth-century self-protection movements has intensified the Indian state's need to retain its legitimacy with the mass electorate by offering an alternative. After years of ignoring informal workers in their labor regulations, policies, and even labor-force surveys, since the 1990s the Indian state has invested considerable resources in defining, counting, and recognizing informal labor as a “new” political class. In 1997, the Delhi Group of statisticians was formed as part of the UN Statistical Commission to address the methodological challenges in counting informal workers. In 1998, India's Department of Statistics accepted the 15th International Committee of Labor Statisticians’ definition of the informal economy in Indian labor surveys. In 1999, the government's National Sample Survey on Employment and Unemployment (NSS) tried to capture informal labor for the first time by including detailed questions on employment status, location of work, enterprise characteristics, and workers’ social and political conditions. A follow-up household survey was also conducted to count home-based informal workers and informal enterprises. Since then, the NSS has regularly included questions to capture India's mass of informal workers, as well as information on informal workers’ employment, political, and social conditions (in and out of registered enterprises). In 2004, the government launched the high-profile National Commission for Enterprises in the Unorganized Sector to examine productivity in the informal economy. In 2012, the National Statistics Council finally underlined the need to collect statistics on informal workers, writing, “The development of the [informal] sector has a potent role in ‘inclusive growth.’ … A framework of statistics … is the need of the hour.”
These efforts and the speed with which they were enacted are significant in that they have legitimated informal workers, even though they operate outside state labor regulation. They also helped forge new relations and alliances between the state and informal workers. In other words, they are a clear instance of what Nancy Fraser calls “emancipatory movements” (which fight for the recognition of previously excluded groups) allying with marketization forces against earlier self-protection forces. Indeed, informal workers' groups have been demanding official recognition in statistics and policies since the 1970s. But it was only recently that the Indian government began including informal workers’ groups as advisers on policy changes; they supported informal workers’ organizing efforts; and they formally acknowledged informal workers’ economic contributions. In return, informal workers have allied with the government's call for labor flexibility; informal workers’ movements have not demanded job security, although they have demanded protections in their informal status. Perhaps most importantly, they have agreed on the vilification of formal workers. Here the state has successfully stoked informal workers’ anger and resentment at being excluded for decades by formal workers’ movements.
Implications of the New Hegemonic Project
The Indian state's open promotion of informal labor, as a political project, has three worrying implications. As I outline in subsequent sections, each of these has also spurred counter-hegemonic responses that deserve our attention.
First, although the share of informal employment in India has remained relatively stagnant since the 1980s (hovering around 90–93%), informal employment has now been normalized, even idealized in some cases. This is a far cry from earlier expectations that formal employment would expand to serve as the dominant norm. From labor's perspective, normalizing informal labor is a direct assault on India's democratic ideals, because capital is being freed from the democratic pressures that continue to bind the state.
In India, the informal sector is often called the “unorganized” sector, referring to the decentralized, unprotected nature of work and production in unregistered enterprises. But today, informal work has also come to characterize India's “modern,” organized sector in large, registered enterprises. Contrary to common perception, employment in large, registered enterprises (in the public and private spheres) has actually increased in India, from 12% in 1985 to 34% in 2011. But the largest share of this increased employment (22%) has been taken up by so-called “informal-regular” workers, who receive a finite contract guaranteeing the number of work days, but do not receive non-wage benefits or other labor rights. In 2012, two million contract workers were estimated to be working in the government and public-sector enterprises. In many cases (including automobiles, garments, and steel), informal workers have become so normalized that they often perform the same functions as formal labor and even work side by side with formal workers. That informal employment is growing three times as fast as formal employment in registered enterprises is significant, because despite the public debates that have called for flexibility and not attacked wages, the reality is a shift to short-term security but with lower wages and benefits. Since 1999, wages have been stagnant,.
A second implication of the state's unabashed promotion of informal work in India is that informal work has come to characterize the non-agricultural sector (as well as the agricultural sector). This has resulted in a flawed structural transition in India. The structural transition (i.e., the movement of labor out of agriculture and into non-agricultural jobs) has long been viewed as the foundation for Indian development, and in 2011, India reached the tipping point, with 56.3% of labor in non-agricultural jobs for the first time. However, contrary to expectations, this transition has not translated into better jobs or livelihoods for Indian workers. A large part of the reason for this is that Indian workers who have left agriculture have gone into services or construction, not manufacturing as expected. Unlike in other late-industrializing countries, growth in India's manufacturing employment, which is the sector that enjoys the most labor regulation, has been thin, from 11% in 1999 to only 13% in 2011. In contrast, services, where labor law enforcement is notoriously weak, employed 30.5% of the labor force in 2011, indicating steady growth since 1999, when it was 25.7% (NSS 2012). Construction, where labor laws are nearly absent, has been the fastest-growing labor absorber in India since 1999, with employment share growing from 5% in 1999 to 11% in 2011 (NSS 2012). Although the service and construction sectors contribute a substantial share of India's GDP today, they are notorious for informal, unprotected employment.
Finally, informal work in India has become increasingly male in the contemporary era. Despite trends toward the feminization of labor globally, Indian labor has shown a striking defeminization, with a drop in the female labor-force participation rate starting in the 1990s. That this drop occurred just as labor-force surveys were improving efforts to capture informal work (where many claimed that women were disproportionately employed) is all the more puzzling. While the drop in female labor-force participation is apparent across the income scale, it is particularly pronounced among poor households, and thus cannot be attributed to growing household wealth and reproduced patriarchal norms preventing women from working. Part of the drop may be attributed to the drop in contract work for unregistered enterprises and the related rise in contract work for registered enterprises. Although the number of women contract workers in unregistered enterprises fell by 10.4 million between 1999 and 2011, women were reincorporated into the growing informal work in registered enterprises to the same extent as male workers were. So how are poor women ensuring their reproduction and their families' survival?
Much more detailed research is needed to better understand the reasons for and the consequences of this puzzling drop in female labor-force participation rates. At a very preliminary level, my own research with informal workers in domestic work, garbage collection, bidi manufacturing, garment manufacturing, and construction suggests that women are increasingly entering occupations that are even more invisible than in the past. For example, women are increasingly leaving construction (due to increased mechanization) and going to paid domestic work. Paid domestic work is not recognized as work in India, and is therefore not covered by any labor legislation, even the Minimum Wages Act (which traditionally covered all workers, even those in small enterprises). This has led not only to a new set of challenges for labor, but also to a new set of demands among labor organizers.
COUNTER-HEGEMONIC MOVEMENTS AMONG INDIAN WORKERS
If we are to draw on the theoretical framework laid out at the start, then we cannot simply stop the investigation with an analysis of the hegemonic forces from above that constrain class struggle and build consent. State–society relations are dynamic, and to examine the dynamism, we must now bring in Polanyi and Fraser to examine the limits and potential of the counter-hegemonic movements that also arise.
Karl Polanyi taught us about the “double” movement—that is, a movement (sometimes from the left, sometimes from the right) designed to counter marketization forces by fighting for the decommodification of labor through protection. We know quite a bit about how these movements unfolded during the twentieth century, resulting in a group of workers who were formally employed and thus entitled to formal protections and regulations. But, as we have also seen above, the fruits of these movements have been deftly and subtly undone in India. So how are informal workers reacting?
In some cases where informal work has been so normalized that formal and informal workers operate side by side, they have joined hands to organize together, for the first time in India's recent history. This move has been powerful, precisely because such solidarity threatens the very basis of the state's political project of defining informal workers as an alternative to formal workers and thereby dividing the working class. On February 20–21, 2013, for example, Indian workers embarked on the largest and longest mass work strike since Independence, including the unionized and non-unionized, the formal and informal. Another, even more famous example is the 2012 autoworkers strike at the Manesar plant of Maruti Suzuki India in Haryana, in which workers, 65% of whom were non-permanent contract workers, demanded improved labor rights, particularly their right to form a union. These efforts are, of course, also limited, as capital has usually been quick to respond. In the Maruti case, the workers’ protests were severely repressed (by state police), and employers altered their business strategies, so very few manufacturing plants now employ informal and formal workers on the same shop floor. Instead, informal workers are now hired by outsourcing through other companies, further absolving the principal employers of responsibility.
In other cases, informal workers have launched innovative efforts to decommodify informal labor in the rapidly growing non-manufacturing sectors. India's flawed structural transition, where agricultural workers were absorbed into construction and services, rather than manufacturing, has forced India's poorest workers to organize themselves in new ways that differ from twentieth-century political models based on manufacturing. The construction and service sectors are largely unregulated in terms of labor, as they were not the focal points of twentieth-century labor movements, when manufacturing was expected to be the fastest-growing sector in industrializing economies.
Perhaps the most developed and successful of these new efforts at self-protection has taken place among construction workers (Agarwala 2013). Since the 1980s, Indian construction workers have organized into unions and pressured elected politicians at the local, state, and central levels to enact new legislation to protect their working conditions and provide welfare benefits, decommodifying their social reproduction costs. To attract state attention, they drew on a symbolic rhetoric equating themselves to the deserving “poor,” and their structural power as voters. They tend to appeal to any political party in power, rather than a single party representing labor. In 1996, construction workers succeeded in obtaining a comprehensive national law designed to regulate construction work and a cess (or tax) and welfare act requiring all state governments to constitute a welfare board for construction workers (for more, see Agarwala 2013). The welfare board is an innovative tripartite institution that dispenses welfare provisions to construction workers. The boards are implemented by the state government and funded by the state, workers’ fees, and a tax on large builders. As a member of a board, workers are entitled to welfare benefits, such as housing, education scholarships for children, health care, funeral expenses for work-related accidents, and pensions.
Through continued mobilization (including judicial activism and electoral campaigning), construction workers have pressured all the states in India to constitute welfare boards. The boards have amassed millions of dollars in funds. But success in implementing board benefits has varied by state. Some boards are doing what they should do; with others, disbursement of funds is scant, registration of workers is low, and politicians have abused the funds for their own political purposes. As I have argued elsewhere, the conditions for success and failure depend on the political and economic context in which they are implemented. Those operating under competitive populist parties, even neoliberal ones, have been more successful than those operating under a single, hegemonic party, even communist ones (Agarwala 2013).
Although the implementation of welfare boards is mired in predictable challenges, ignoring their benefits or their potential (or sidelining them as mere subsidies to capital) leaves them even more vulnerable to the pressures they are currently facing. Also, focusing only on their limitations risks missing the real potential they hold for future labor movements. They remain the only attempt by workers in India to address informal workers’ reproductive costs. In an era when employers are being absolved of all responsibility to labor, construction workers have managed to force a modicum of accountability onto employers through the welfare tax. That welfare boards have now amassed massive sums of money to cover poor workers’ reproductive costs across the country is no small feat and should not be too quickly brushed aside. This is the first time in India's recent history this has happened. Construction workers’ welfare boards have also served as a mobilization tool to organize new construction workers—a population that is often hesitant and even scared to join a union. Compared to other informal workers, we have found that construction workers’ struggles (where present) have also resulted in more timely payments and a weekly day off.
Although construction workers’ struggles are not featured in the press or in scholarship as much as many other recent grass-roots movements in India, their victories have served as a model for other informal workers’ movements, including those in the services and manufacturing sectors, and those in a different employment relationship, such as self-employed workers. In this way, the movement for informal workers’ welfare boards serves to expand the number and types of beneficiaries of state welfare to include more diverse employment relationships, as well as occupations dominated by excluded minorities, including women and members of the lowest castes. This brings us to Fraser's “triple movement” for emancipation.
One of the most important points to highlight when analyzing informal workers’ movements today is that informal workers were not only excluded from twentieth-century labor regulations, statistics, and policies, they were also (in effect) excluded from the conceptual and ideational category of workers. Still today, despite the growth in informal employment, the cries of “jobless growth” exclude informal workers and their jobs from our understanding and from definitional boundaries around “labor” and “work.” To address this exclusion, informal workers’ movements have launched emancipation struggles that fight for recognition and the redefinition of arbitrary classifications of who is and who is not a worker. In addition to fighting for self-protection, therefore, informal workers’ efforts aim to redevelop the working class to include many more members and occupations than ever before. In addition to fighting for recognition of multiple employment relationships, informal workers’ struggles reflect an effort to blur the distinctions between different categories and identities of vulnerable populations; therefore, in addition to proposing relational worker identities, informal workers appeal to ascriptive identities around categories of “gender,” “migration status,” and “caste,” as well as strata identities, such as “the poor.” In doing so, they remind us that these identities are not mutually exclusive, but mutually determinative, in the everyday lives of the working poor. Let me outline a few examples of such emancipatory movements.
First, the incorporation of informal workers into Indian labor-force surveys should be viewed not only as part of the Indian state's hegemonic move from above, but also as an emancipatory effort by informal workers to increase recognition of their labor. Informal workers’ organizations worked closely with international knowledge brokers, such as Harvard University and the International Labour Organization, to pressure the Indian government to incorporate the recommendations of the International Conference of Labour Statisticians into India's national labor-force surveys. Today, it is difficult to find an Indian government official who does not quote the labor-force survey, acknowledging that “93% of India's labor force is informal.”
Second, a key aspect of informal workers’ welfare boards (in construction as well as in other occupations, including garment workers and domestic workers) is to recreate the class-based identity of “workers” to include informal labor. In addition to promising material welfare benefits, welfare boards demand recognition through state-certified workers’ identity cards. Board members receive identity cards that prove their status as a worker, even without employers’ formal recognition. In my interviews with informal workers across occupations, they mentioned this card as one of the most important benefits they have received.
Particularly striking has been self-employed workers’ efforts to be included in the broad category of the “working class.” Many self-employed workers operate in a mixed class location, with some interests of capital and some of labor. Yet, across several occupations, self-employed workers have fought for welfare boards that give them not only material tools, skills training, and welfare, but also recognition as workers. Domestic workers are one of the newest groups of self-employed workers to organize as a class. Although Indian domestic workers have been organizing since the 1950s, their organizations have grown since the International Labour Organization passed Convention No. 189 on Domestic Work in 2013. Today, there are 69 registered domestic workers’ organizations in India; 83% of these are unions, and nearly all are exclusively female (Agarwala and Saha 2018). Following the model of construction workers, domestic workers are fighting for comprehensive legislation to regulate their work and give them benefits through welfare boards. They are also fighting to be incorporated into 14 existing labor laws (from which they are explicitly omitted at present).
Domestic workers are keenly aware of the present context, where labor law enforcement is waning. But they express their fight for labor legislation as a demand for recognition of themselves as workers at least as much as a demand for protection. It is also a redefinition of who qualifies as an employer (a buyer of services), a place of work and profit (a private home), and a relationship of exploitation (where labor is not being directly profited from). Finally, domestic workers argue that having the law in place (even if it is not enforced) gives them the threat of power over their employers, something they currently lack. They have obtained some legislative victories at the state level, and welfare boards in four states. Interestingly, the cumulative failures to obtain national legislation have galvanized domestic workers’ organizations into joint action at the national level. And at the foundation of domestic workers’ movements has been a drawing on “gender” tropes to get national and international attention (Agarwala Forthcoming a).
Another group of self-employed workers who have organized in recent years are recycling and waste or trash collectors, most of whom are members of the lowest castes. Like domestic workers, trash collection workers have tried to expand the definition of the “working class” by broadening the concept of “exploitation” beyond the SER to include exploitation by state officials (such as municipal offices responsible for trash collection, or the police, who take bribes to stop hassling street vendors), as well as middle-class residents who employ informal trash collectors or who control public spaces (Agarwala 2015). In this way, waste collectors have fought for (and in many cases obtained) state-certified identity cards, which help them access government health and pension programs and get voter identity cards and ration cards for the public food distribution system, all of which require residence documentation (which these workers usually lack). They have also formed innovative cooperatives to ensure their access to income, such as SWaCH in Pune, through which they negotiated a municipal contract to serve as the city's official household trash collector and sorter. Although households claim to “buy” the service of door-to-door trash collection for a “user fee,” wastepickers have redefined the exchange as “wages.” Wastepickers have also demanded that NGOs that hire wastepickers to clean public toilets as a public service pay fair and timely wages for this work, rather than categorizing them as “volunteers.”
Finally, a third group of self-employed workers who have organized are home-based garment workers. Indian garments constitute 30% of export earnings, indicating the high value-added component of the industry (Agarwala 2015). In the state of Gujarat, home-based garment workers and headloaders (who transport garments from homes to wholesalers and retailers on their heads or on handcarts) have obtained identity cards from the state government. They have also obtained a state-level welfare board, which offers both productive capital and reproductive welfare: a sewing box with scissors, a table, and other tools; skills training; and INR 1,200 for medical needs. In some cities, they have negotiated collective wage/fee agreements with shop owners, who claim to “buy” the finished garment pieces or the transport service. They have redefined the unit of minimum wages to be on a piece-rate basis, rather than a time basis. And they have gotten a seat on the minimum wage advisory committee at the national level.
Self-employed workers often define themselves as being exploited by urban formal workers. Formal workers’ protections and benefits, self-employed workers argue, are subsidized by the unprotected and unregulated goods and services that self-employed workers provide. Self-employed workers not only provide inputs for formal employers and workers, they also enable the underpaid subset of formal and informal workers to reproduce themselves.
Indian informal workers’ budding countermovements highlight the double-edged class consequences of the Indian state's post-reform strategy. On the one hand, the state has enacted a new hegemonic model of the Gramscian variety by deftly enforcing capitalist class power over labor's class power while still retaining democratic legitimacy with the working-class mass. The Indian state has constricted class struggle and obtained mass consent for reduced protections by shaping the public debate on labor toward the need for labor flexibility as a pathway to employment for vulnerable populations, vilifying formally protected labor as an obstacle to employment for vulnerable populations, and building a new political class of informal workers who serve as representatives of vulnerable populations and as an alternative to formally protected labor.
On the other hand, the state's actions have opened the door for new groups of informal workers to organize and demand an alternative labor protection model of the Polanyian variety. This double-edged consequence showcases the dynamic and often contradictory relationship the Indian state has with class forces. As Burawoy (2003:199) writes, “If Gramsci starts out from the way civil society, through its connection to the state, organizes consent and constricts class struggle, Polanyi starts out from the way active society counteracts the dehumanizing effects of the market economy.” To Polanyi, society is understood in its contradictory relationship to the market. “On the one hand, the market tends to destroy society, but on the other hand, society (re)acts to defend itself and to subordinate the market” (198).
Equally important to informal workers’ self-protective efforts to decommodify their reproduction costs are their efforts to launch recognition struggles that could emancipate them from symbolic injustices (of the Fraser variety). After decades of being excluded from the formal labor movement, informal workers are now asserting a politics of recognition, which aims to redefine who is “a worker” and increase the number of beneficiaries of labor protections, and a politics of welfare, which aims to highlight the reproductive costs of all workers. In the process, they are reasserting the state's democratic responsibility to labor citizens. The focus on citizenship rights appears to be focused on reproductive costs, welfare, and explicit attention to gender and race/caste/ethnicity.
Key questions remain: how does this triple movement among twenty-first-century workers look at the global level? In particular, what forms of alliances are being cemented between the three movements of marketization, self-protection, and emancipation? Much has been written about the converging norms of market-based, neoliberal policies across the world. But we know far less about converging (or diverging) norms with and between self-protection and emancipatory movements around the world. In 2012, I joined a group of scholars to launch a network to examine these questions in informal workers’ movements across seven countries.3 Our preliminary evidence indicates that movement strategies from below may be converging by traveling from the global South to the global North via migration patterns. Across countries, we find that informal workers include more women, more migrants, and more occupation types than the traditional labor movements of the twentieth century. Moreover, they tend to have more women leaders than former labor movements. The politics of recognition is apparent across country contexts in struggles for new protective laws and revised class-based identities. The politics of redistribution, using a rhetoric of “citizenship rights” as workers with reproductive costs, is also apparent. Finally, we find an increased diversity of organizations addressing these issues, including unions, NGOs, cooperatives, and faith-based groups (Agarwala 2014; Chun and Agarwala 2016; Agarwala and Chun, forthcoming).
Let me end with where I began regarding the debates around pessimism and optimism. The hegemonic moves toward increased marketization and commodification of human labor by states and capital are bad news for the world's workers. But workers are not lying down as idle victims. They are launching countermovements, which are currently at an infant stage that is rife with challenges and limits. But this infant stage is also a crucial stage. It is the stage that precedes the attainment of formal legal rights. It is the stage that Peter Waterman (1993) captured when he conceptualized the term “social movement unionism”—that is, the stage of mobilizing and identifying people under a common frame. This is the stage that was equally important to twentieth-century workers’ movements.
Therefore, while acknowledging the dismal prospects of the present period, we must also not write off the other side of the truth (i.e., the potential of the current moment). To brush off an informal workers’ movement because it is small is analytically timid; we know that even small movements can have huge discursive and symbolic effects. Moreover, we know that movements are not static. Their being at an early stage tells us nothing about their potential in a future stage. More importantly, writing these movements off prematurely risks undermining them just as they are getting started. Polanyi must always be understood as holding hands with Gramsci and Fraser. By doing so, we can assure a more critical historical analysis to inform a more critical analysis of the future.