From Subsistence Production to Precarious Work

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iberal economic reforms implemented in Sri Lanka since the late 1970s have facilitated the transfer of a majority of people from rural livelihoods to non-agricultural activities, mostly in the informal sector.

As is well known, a majority of rural people engaged in largely subsistence-oriented farming before economic liberalization and many of them combined this with non-farm activities like handicrafts, hand-loom and wage work. The situation today is different. Though a significant minority of people engage in regular, formal sector employment under favourable working conditions, a  large majority of adults, more than 60%, are dependent on unstable, unpredictable and irregular income-earning activities under unhealthy conditions. These are often described as precarious work in international literature on employment relations.

The reason for such labelling is that most of the people involved do not have formal, stable and long-term employment contracts even when they engage in wage-earning activities. Moreover, many people in the informal sector are self-employed and usually earn their income on a day-to-day basis. They are often compelled to work beyond their retirement age due to the absence of any old-age social security. More and more people working for large firms have also become casual workers through sub-contracting and out-sourcing arrangements.

It is common knowledge that a significant proportion of the country’s labour force, already more than 20%, is engaged in temporary employment overseas and most of these workers engage in such employment for several years. They often do not save enough to meet their future needs. In other words, overseas employment is also a form of precarious work.

The above developments and their consequences need to be examined against the backdrop of the aspirations of earlier generations of workers, both in this country and elsewhere.

But such regimes  had greater political legitimacy as high levels of social provision promoted equity and equal opportunity. On the other hand, even in countries that followed a liberal democratic model of development, economic growth and the resulting rapid expansion of employment led to better working and living conditions for the vast majority of citizens

Until neo-liberal economic reforms engulfed almost the entire world in recent decades, while most countries outside the western world remained by and large underdeveloped. So, higher standards of living measured in terms of both per capita income and the satisfaction of various material needs of diverse social and demographic groups remained mostly confined to the developed countries. Liberal economic reforms have enabled many countries outside the hitherto developed world to achieve high rates of economic growth and higher levels of wage employment. Newly established, export-oriented industries in these countries have absorbed millions of workers, facilitating mass rural-urban migration. Yet, economic development outside the western world has been highly uneven.  Creation of employment and income distribution have also been uneven, both within and across countries. Income distribution in most of the countries that have achieved high rates of economic growth such as China, India, Brazil and Russia has become highly unequal.

Moreover, most of the jobs created in these countries do not conform to the employment standards that emerged in the industrial countries of Europe, Japan, Australia, etc. The increasing influence of social democratic forces by way of socialist political parties, trade unions and leftist intellectual discourses persuaded governments in many industrial countries to adopt a range of social legislation and public policies that ensured stable employment, minimum wages, employment-related social benefits and old-age pensions.  Furthermore, increasing public investments in such fields as education, health, public housing, public transport and family welfare substantially improved the life chances of ordinary citizens.

Developed industrial countries, however did not follow an identical model of social and economic development. While there were significant variations in the manner in which social sector services and welfare benefits were made available to citizens, the extent of direct state intervention varied accordingly. Where state intervention was the greatest and most pervasive, the taxation rates were also high.

But such regimes  had greater political legitimacy as high levels of social provision promoted equity and equal opportunity. On the other hand, even in countries that followed a liberal democratic model of development, economic growth and the resulting rapid expansion of employment led to better working and living conditions for the vast majority of citizens. The situation in much of the developing world was quite different. Economic underdevelopment, widespread poverty, unemployment, underemployment, poorly developed social sectors like health and education  and the lack or inadequacy of social benefits kept the living and working conditions of the masses at a very low level. In other words, a large majority of the population in the world remained at or just above subsistence level and were excluded from the benefits of development that most citizens in the developed world had enjoyed for decades.

On the other hand, western capitalism could no longer expand on a global scale without the participation of the excluded masses in both production and consumption. It is against this background that the western financial capital, largely freed from state regulation thanks to liberal economic reforms, found its way into the developing world, in particular China and India, the two largest countries in the world.

Motivated by the desire to attract foreign direct investment, the governments in many developing countries not only created conditions highly attractive to foreign investors but also by and large allowed the market to determine the conditions of employment. The results have been low wages, insecure employment, the absence of many social benefits like health insurance, paid medical leave, the lack of old-age pensions and poor safety at work places. These are conditions that usually existed in industrial countries during the early stages of industrialization.

On the other hand, despite these conditions, many emerging economies have created millions of jobs and became leading exporters of industrial goods. Already China is dubbed as the industrial power-house of the world. Cheap industrial goods have already flooded the consumer markets across the world, while investors from economically-developed countries have established highly profitable businesses in countries where governments have ensured the supply of cheap and largely unregulated labour and lower taxes for businesses. The profits from such investments have been flowing steadily in the direction of already developed countries where financial capital and technological capacities continue to remain largely concentrated. The result is unprecedented income inequality on a global scale, a phenomenon well illustrated by Thomas Piketty, the well-known French Economist, in his latest book titled: ‘Capital in the Twenty First Century’ (2014).

The present phase of global capitalist development has a number of significant features. Firstly, it has mobilized a very large part of the world population as producers and consumers within a globalized system of production and consumption. Yet, the living and working conditions of most of the workers remain much to be desired. Many of them are constantly on the move, both within and across countries, preventing them from establishing stable, personal, family and community lives. Secondly, the rapidly increasing use of natural resources for the production of goods and services continues to undermine the sustainability of human life and bio-diversity in all parts of the globe. And, finally, growing global inequalities feed into violent conflicts within countries and destructive wars across countries, creating an uncertain, unsafe and unpredictable global environment.  On the other hand, many of the violent conflicts raging in different parts of the world are increasingly connected to ever more complex religious and other ideological divisions that provide the basis of competition for territory and resources.

Emergent global context  characterized by environmental calamities, increasing global warming, unending political conflicts, increasing income  inequality and mass population mobility is hardly conducive for sustainable  economic and social development that is necessary to create decent and stable work to ensure the  present well -being and future social security for millions of people who are engaged in precarious work today. However, neither global institutions nor national governments seem to have the will or the capacity to do much to free the millions of precarious workers from their present sorry situation.

An entrenched  global elite comprising  the owners of financial capital, executives  of business firms, technical and professional groups and others who can easily tap into global financial flows has the power and the freedom to decide who does what,  where and under what conditions

An entrenched  global elite comprising  the owners of financial capital, executives  of business firms, technical and professional groups and others who can easily tap into global financial flows has the power and the freedom to decide who does what,  where and under what conditions. There are already signs that more and more people realize the need to change the way that dominant global elites manage human affairs to make the world  just, equitable and sustainable.