Mallika (name changed) was four years old when her mother migrated to Bangalore city from a small village near Thiruvanamallai back in the late ‘80s. Although Mallika’s mother was an illiterate agricultural labourer, she was lucky to find stable, permanent residence in poor but safe slum area. Regular employment as a domestic maid in a number of apartments in a nearby affluent area enabled the mother to send Mallika to the government school close by, and Mallika surprised everyone by going all the way to standard 10 and passing with a second class in Kannada medium. By then, Mallika’s mother had won enough goodwill with a few benevolent employers to fund her education through PUC (plus 2), and also help her learn some basic English. The young girl was showing a liking and an aptitude for math and science, but no one was prepared for what was to come… Mallika got a 1st class in her PUC second year, and even got a rank (though it was over 8,000) in the state common entrance test. With the help of a valid reservation category certificate, Mallika went on to do a BE in Computer Science in an engineering college at Bangalore, during which time she also did a project in which she learned java and C++. After a tense 6 month wait following successful graduation, Mallika landed a job in a small software development company where she made a reputation as a hard worker, even if not exceptionally brilliant. Two years later, she was picked up by her former manager, who had switched jobs by then, to join one of India’s big 5 software companies, which has a market capitalization of a few billion dollars and a headcount of several thousand tech professionals. Today, Mallika lives in a small but comfortable and well furnished apartment with her mother who has stopped working. She has visited Singapore and the US to work on projects for clients and is a team leader.
Mallika’s story, though quite extraordinary and fairy-tale like, is not unique. The transformation in her life has been played over, though less dramatically perhaps, and starting from more favourable levels, with hundreds of thousands of young men and women in India over the last 20 years. Most working professionals today enjoy a better standard of living than their parents and grand-parents. However, in general, the growth opportunities start from a much higher base level than the one that Mallika began at. In fact, in her case, a number of favourable factors combined with her diligence to help her pole-vault to a higher economic level… for instance, she and her mother lived in one house for several years, the government school she went to was actually functioning, she did get support in terms of funding, encouragement and occasional guidance from her mother’s upper middle class employers. The sad part is, that just as there are hundreds of thousands of people who have been transformed by education and new economic opportunities, of which Mallika is a more extreme example, there are tens of millions of young people who are unlikely to ride the wave of transformation.
So what is this transformation? What is the destination of this desired change? To a large extent, it is a transformation from being employed in the unorganized sector to the organized one. I say to a large extent, because there are notable exceptions. Everyone in the unorganized sector is not poor, and everyone in the organized sector is not comfortably off and above being vulnerable to economic shocks. There is however, a strong correlation. In the organized sector, employees have structured compensation, some level of job security and predictability, some level of leave with pay, especially for emergencies such as medical conditions; in the unorganized sector, nothing is sure for daily wage worker or labourer, in terms of where they would be working and how much they would be earning even a few weeks later. Often, there is no insurance, no protection of earnings for periods of illness or injury, no long term job security. But, probably the most important difference is, that in the organized sector, a person can grow professionally by getting training or varied experience. A person can change her field, such as an engineer who gets an MBA and moves to finance; a person can get promoted by getting an advanced training; in the unorganized sector, no such opportunities exist. A labourer remains a labourer all her life and can continue to earn wages as long as she has physical strength to perform the same level of work. Even a relatively skilled unorganized sector worker, such as a self employed motor mechanic on the road side, cannot claim a faster growth path by attending a training program – market conditions simply do not allow such a change practically, though it could be theoretically possible. The market may also not be willing to pay a higher wage for a higher level of skill to an unorganized sector worker simply because standard mechanisms do not exist for benchmarking, assessment, certification and additional training. For instance, the salary that a qualified accountant can command in the organized sector would be a function of his experience in terms of time, performance, different assignments handled and so on. Also, in any new job, he would get paid leave, insurance coverage, savings fund and other benefits as part of a standard package. On the other hand, the wage and benefits that a domestic maid can receive would only depend on her negotiating ability and the benevolence of her employer.
The stark reality is that in India today, over 90% of the working population is in the unorganized sector. The solution is clearly not to try to transform this huge, fragmented work force of over 400 million, to the formal sector… its always tempting to try to simplify problems to address them more effectively, but in doing so, we create an illusion of simplicity which we may try to solve through a single silver bullet. In fact, post-independence, the Indian government tried exactly this, i.e. to provide state-controlled organized sector employment (through PSUs, or public sector units) and hope that progressively the entire working population would be covered. Unfortunately, even without considering the number of PSUs which have gone sick or are loss-making, this idea is a relative failure as far as creating mainstream employment goes, because all PSUs together do not employ more than 30 million people.
Then what is the solution? I’m not sure what it is in terms of a series of executable steps, but I think I can visualize what the solution would mean in terms of visible change.
On the one hand, it would mean more Mallika’s climbing up the social and economic ladder by getting and converting more opportunities. Clearly, once an individual has received education and the capability to secure higher value jobs, to a large extent, she becomes competitive and secure from economic shocks, vulnerability and exploitation. Her dependents and she make a permanent climb to a higher social and economic orbit.
On the other hand, it would mean more standards which are organized-sector-like stretching down to prevail in the huge, anarchic, jungle-law-governed unorganized sector. This would mean a complex set of levers to be applied, including state legislation, recognition by employers of the need for more fair and humane practices, improved professionalism among workers to increase their bargaining power, pay for performance irrespective of the type of work (i.e. a general acceptance of the concept of dignity of labour and delinking type of work from caste, class and community). For instance, today, sewer cleaners in many parts of the country come from particular Dalit communities, and they are looked down upon because of the work they do, for which they are paid peanuts and exposed to dangerous and unhealthy conditions. Now, sewerage systems exist in every country of the world, but in developed countries, sewer cleaners are trained, certified, insured, provided with protective clothing and equipment, and respected for the job they do. If sewer cleaners would have such fair conditions to work in and get paid fair wages which may include special allowances for hazardous work, then who knows, cleaning sewers could become a competing alternative career path to accounting and software development – at the end of the day, it’s a job!
So, we need that magic method, or a combination of several hundred methods, to push more Mallika’s up, and to push better practices and standards down, to provide transformation, mobility or just better conditions, to people like Mallika’s mother… just imagine what would happen, if the 90% of our work force who make up the unorganized sector are empowered to perform and produce, and are also treated, more like the 10% who hold up much of the organized economy!
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