6/6/2014 End labour informality- The Hindu

http://www.thehindu.com/opinion/editorial/end-labour-informality/article6086152.ece?homepage=true 1/2
Follow
115k
Follow
Today's Paper Archive ePaper eBooks Classifieds Subscriptions Mobile Apps Social
Opinion Editorial
End labour informality
The World of Work Report 2014 catalogues the impressive strides developing countries are making to catch up with
advanced nations. But the International Labour Organisation study also contains important caveats on the cost from
continuing sharp inequalities. Per capita income has grown on average by 3.3 per cent per annum in 140 countries
over the past three decades, as against 1.8 per cent in the advanced economies. But this process of global convergence
has by no means been uniform, as some least developed countries have performed well below the advanced economies.
Such sharp variations are accounted for in terms of the presence or absence of quality jobs, the report contends.
Vulnerable employment presents a formidable challenge, as more than half the workforce in the developing world
numbering 1.45 billion is either self-employed or undertakes unpaid economic activity. That is to say, such a large
population goes without a guaranteed income, social protection or adequate investments in the health and education
of families, putting in jeopardy the future of coming generations.
Senegal, Peru and Vietnam are instances cited in the report where there has been an increase in the proportion of
wage and salaried workers over the past two decades, leading to significant reductions in working poverty and higher
productivity. Better wages did not merely cushion these countries from the impact of the global meltdown. Working
2.8m Like
6/6/2014 End labour informality- The Hindu
http://www.thehindu.com/opinion/editorial/end-labour-informality/article6086152.ece?homepage=true 2/2
in tandem with other determinants, they in fact enabled these economies to grow one percentage point faster than
other emerging economies since 2007. Instructive is the finding that a sizeable proportion of wage-earners in a
society help to reduce income inequality and under-employment in the workforce. The obverse is also true. Widening
inequalities also produce adverse effects on economic growth in terms of low consumption, not to mention the
detrimental effects on social cohesion and stability. A significant increase in regular wage employment in both rural
and urban India over the two-year period ending in 2012, as reported by the latest round of the National Sample
Survey Organisation, is indeed encouraging. The findings also point to faster growth in employment in the
manufacturing and services sectors. It is critical for State governments to consolidate on this momentum. Not in the
least because the developing world is set to account for 90 per cent of the total jobs to be generated in the next five
years and Indias share in it may not be insignificant. Enforcement of statutory minimum wages across different
economic sectors would be critical to strengthening the workforce as well as to raising overall productivity.
Keywords: The World of Work Report 2014, International Labour Organisation, ILO study, National Sample Survey
Organisation