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Lockdown effect: Surat's 10 lakh migrant workers 'lose' Rs 9,000 per month each

By Gagan Bihari Sahu*, Biswaroop Das** 
A large section of workers in Indian cities working in marginal occupations and unregulated jobs come from households that struggle to survive on weak economic and meagre resource bases across its villages and small towns in the countryside. These workers in cities and urban peripheries put efforts to earn money for enhancement of the economic status of families back home through remittances.
Trying to find a grip over a range of unprotected segments and job types, they continue to struggle and negotiate with changing employment scenarios and wage conditions in the informal as well as formal sectors of urban labour markets. While a section remains ‘under’ or even unemployed, a large majority attempts to sustain their livelihood through a variety of ‘informal’ jobs and self-employment.
The current nation-wide lockdown has been a major cause of job destruction in urban pockets affecting these workers badly. The production is standstill, machines are quiet and markets are closed. In spite of government’s appeal, many employers have either removed their workers, deducted salary or simply closed doors.
The loss of jobs has made workers more and more insecure and compelled to leave for their native homes. This has led to a wide range of social and economic insecurities among them; unleashed uncertainties associated with their survival and sustenance in job markets, and eroded their capacity to negotiate with the present crisis.
The lockdown has affected nearly all segments of migrant workers irrespective of their differential locations in several economic sub-sectors. Jobs in small scale production units are characterised by low regularity in employment, salary or piece-rate mode of payment and a near absence of social security measures.
Nearly 80% of such workers are employed on ad-hoc and temporary basis with the owners able to displace them at will any time. Workers in construction sector are mostly recruited by contractors and middlemen and wages paid in terms of contractual and quasi-contractual modes. With a phenomenal rise in population and intensive internationalization of the national economies, cities are witnessing a higher growth of a wide range of lower and middle order services.
Scales of such enterprises often range from small to tiny under the category of self-employed that also includes jobs in very ‘low’ level production, processing and servicing units. Lower level sales, too, emerge as an important category among such micro enterprises characterised by being ‘irregular on a regular basis’ remaining spread across cities on a daily basis.
Besides, hundreds of unskilled and semi-skilled workers wait at several junctions in cities on a daily basis negotiating jobs and wages that may or may not come their way. All these groups together make a block of self-employed and hired wage labourers who while living under wretched conditions earn miserably. Economy affects them the hardest when sectors face recession or heavy market fluctuations.
The vulnerability associated with these migrant workers can be well speculated through micro level data available from our previous studies. A study on migrant workers from Odisha, Uttar Paresh, Bihar and Rajasthan in the year 2011-12 suggests that the average annual income of such workers was Rs 76,545 in Surat, an industrial hub in the state of Gujarat.
Hailing from Odisha, UP, Bihar, Rajasthan, migrants' households received 52.9% to 61.7% of their income through remittances
These workers were working in powerlooms, embroidery, dyeing and printing units, shops selling textile products, diamond polishing, construction and allied, hardware/sanitary shop and lower level services. 12.9% among them earned more than Rs 1 lakh, 30% between Rs 75,001 and Rs 100,000, 47.1% earned between Rs 50,001 and Rs.75,000 and about 10% earned about Rs.50,000 per annum.
If we assume a conservative rise in their income by 5% per annum, a migrant worker in the city of Surat will have an average annual income of Rs 1,07,163 in 2019-20. It implies that a migrant worker is going to lose an absolute amount of Rs 8,930 income in a month. Depending upon the duration of lockdown, the extent of their income loss can be estimated accordingly.
During the same period, the average size of remittance per worker during 2011-12 was Rs 27,029, which was around Rs 2252 per month. It shows that the share of remittance to total income was around 35.3%. If we assume a similar 5% rise in remittances, migrants’ families back home are likely to have Rs 3,153 less income per month. Across states, migrants’ households received around 52.9% to 61.7% of their income through remittances.
This suggests that remittances are a prime source of migrants’ native household income. A larger share of these remittances was spent towards consumption and medical exigencies. Surat approximately has around 10 lakh of migrant workers.
If we apply this uniform size of remittance, the inflow of money from Surat to rural areas will have declined by Rs 315 crore per month. Thus, the joblessness due to COVID-19 will have larger implications for households adopting migration as their livelihood strategy.
How these migrants and their families are going to sustain their livelihood is a big question. Their coping strategies are likely to vary across regions, extent of assets, government subsidies and incentives, skill types, caste locations and social networks. Studies also suggest that inter-state migration is now taking place more from among other backward castes (OBCs) as well as middle and upper caste groups.
Many among them are unlikely to participate in wage works in their native villages. A majority is likely to meet their needs through borrowings and especially from informal credit market as they hardly have access to banks and formal institutions. There is every possibility that many of them will fall into interlocked credit market where the lenders will have enough opportunity to exploit the borrowers.
As many among the migrants remain stuck well below the poverty line and continue to be labelled as the ‘working poor’, provision of direct benefit in terms of a fair amount of cash and supports to farm and allied economy may emerge a better strategy to deal the present crisis.
Since most of them have no income from multiple sources, their purchasing power is going to reduce drastically. This, in turn, will have a negative impact on the economy in terms of lack of demand. The production cycle will be distorted and not much employment generation will take place. The present scenario of lockdown, hopefully even for a brief period, will have long term implications on the economy and the workers’ lives.
Their consumption will fall, health deteriorate, priorities changed and women and girl child suffer more than the rest. A large section of these groups will slide down faster than being able to cope with this disaster and move towards abysmal depths of poverty and destitution. One half of the country will have work but no labour and the other will have labour but no work.
It is therefore pertinent to understand the complexities of workers’ economic deprivation and factors that may disable them to oil the machines once again and enliven the city streets. Context specific micro programmes and policies will help more than policies which are broad and linear.
---
*Associate professor, Centre for Social Studies, Surat; **visiting professor, CEPT University, Ahmedabad, formerly with Centre for Social Studies, Surat 

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