informal labor | Work in Progress

Image by the author.

by Rina Agarwala

Since the 1980s, as governments have reduced state welfare rhetoric and policy, the proportion of unprotected, “informal” workers has increased. As a result, we have witnessed an unexpected increase in the proportion of the world’s workers who do not receive secure wages or social benefits either from employers or the state. This is not news. In recent years, many scholars and policy makers have highlighted this growing population of unprotected workers, variously calling them “informal”, “precarious”, “casual”, “non-standard”, “Post-Fordist”, and “flexible.” In some cases, these trends are celebrated; in others, they are critiqued.

What explains the worldwide increase in informal employment? The most common explanation is that the pressures of increased competition in a globalized and liberalized marketplace have forced firms to decrease costs by relying on unprotected workers. While this is true, it is equally important to remember that informal work is not a product of neoliberalism. Long before the rise of neoliberalism, informal labor comprised a large section of the labor force in the Global South, because they subsidized the minority of formally employed, protected workers that emerged during the industrialization era (in the South and North).

Informal workers have long been, and not surprisingly continue to be, a central, structural feature of modern economies. After all, it is informal workers that have and continue to (albeit in increasing numbers) construct our buildings, build our roads, grow and sell fruits and vegetables, clean homes and streets, sew clothes, weld car parts, and make shoes – not to mention the boxes they come in.

Photo via http://www.whitehouse.gov/blog/2015/01/26/highlights-president-obamas-visit-india

Photo via The White House

Excitement about India’s role as a rising power was again highlighted by Barack Obama’s state visit to New Delhi in January. Indian Prime Minister Narenda Modi has also made a series of high-profile international visits since his election victory last year. But, as I originally blogged at Progress in Political Economy in February, the reality of work and life in the new India is radically different to the sparkle of Modi’s globe-trotting.

This contrast has been highlighted by many writers (including my colleague, Dr Elizabeth Hill – see her review of Rina Agarwala’s important new book on informal labor in India) and is something I take up in my new book, Informal Labour in Urban India: Three Cities, Three Journeys. The last quarter century of rapid economic growth in India has been underpinned by the mass employment of ‘informal labor’. The book uses case studies of economic development in three urban regions of India: Mumbai, Bengaluru (Bangalore) and the National Capital Region (NCR) of Delhi. I wrote this book after undertaking seven years’ research on India’s informal economy, including my doctoral research with the Department of Political Economy at the University of Sydney. When I first considered undertaking a PhD, I was interested in the impacts of trade and investment between India and Australia on labor markets. I quickly discovered what, for me, was a far more interesting story about India’s transition from a relatively inward-looking, low-growth economy to a globally-integrated, high-growth economy and the impact on employment and livelihoods.