Will the success of the Amazon workers boost us to overcome our own challenges?
A truly historic development took place in the US earlier this month which has attracted little attention in India. The workers of tech giant Amazon’s New York warehouse forced the second-largest employer in their country to recognize the right to form a trade union, thereby legitimizing their right to collective bargaining and protection against exploitation, against heavy odds. The tech giant is long known for its bad labour practices.
The US HuffPost reported that Amazon paid about $4.3 million to anti-union consultants to foil the workers’ attempt to form a union last year (2021) alone. It accessed the company’s disclosures to the US Department of Labour to substantiate its charges. It quoted a study to say that in the US a few companies do spend over $1 million on anti-union consultants for this, but such spending is usually over several years, unlike Amazon.
This victory has far-reaching consequences not just for the US but all over the world, including India, because at least symbolically, it means a reversal of the trend that gained particular force after the neoliberal era began in the 1970s. Ever since then, workers’ rights and their collective bargaining powers have been seriously jeopardized by undermining their trade unions.
Weakened unions and precarity of workers
Sufficient literature exists to show that weakened trade unions and collective bargains have worsened the precarity of workers, including arbitrary hire-and-fire, lower wages and lack of job and social security, all over the world. After all, it is the worker’s unions that negotiate the working condition of workers and protect their rights.
The situation in India is not different.
Navin Chandra, a former senior fellow at the VV Giri National Labour Institute, says multiple factors led to the weakening of trade unions in India right after the Independence in 1947. Four key ones are: (i) multiplicity of trade unions (ii) greater freedom to the industry in the name of industrial growth in the post-reform era of 1980s and the liberalization of 1991 by undermining the role of unions and workers’ collective bargaining power (iii) the Supreme Court’s siding with the government and employers, instead of workers (the underdogs), in the post-reform/liberalized era and (iv) legal changes increasing the threshold of workers to form unions.
This was despite the fact that Chandra pointed out, trade unions played a significant role in the fight for the independence and were united in their fights.
About the last point, which is specifically about trade unions, here are two stiff conditions that have been incorporated in the new Industrial Relations Code of 2020 over the functioning of trade unions. These are: (i) no trade union shall be registered unless at least 10% or 100 workers of an industrial establishment are its member and (ii) in case there are more than one trade unions, only the one with 50% or more workers shall be “the sole negotiating union”.
These are difficult conditions to fulfill and are aimed at weakening, rather than strengthening, workers’ rights and protections.
In all, four new labour codes were passed beginning with 2019. All are anti-worker and pro-employer in intent and together they weaken the workers’ rights: (i) by increasing the threshold for protections against arbitrary hire-and-fire and health and safety of workers (ii) effectively banning strikes (a tool to enforce rights) (iii) minimum wage provisions leave out millions of workers (iv) don’t ensure equal-pay-for-equal work (vi) promise social security to informal workers but is not universal, leaving millions out of it and without concrete plan and funds (vii) encourage temporization of work by promoting and introducing a new category of contract workers and (viii) dilute oversight mechanisms to the point of irrelevance.
The ILO has repeatedly drawn attention to the significance of trade unions in India, specifically in suggesting policies to enhance wages and collective bargaining so that wages grow in tandem with labour productivity. That is because it said Indian workers are increasingly denied their share of productivity growth and profits. These suggestions have been ignored.
There are two key reasons why even in future, the trade unions and workers’ rights would continue to be hurt.
- More than 90% of workers in India are in informal sector with little legal protection for their rights, job security or fair wages.
- Short term contracts and casual workers are growing rapidly even in the abysmally small formal sector, including government jobs, and even among the best quality jobs – regular wage/salaried workers. According to the last annual PLFS of 2019-20, 67.3% of regular wage/salaried workers don’t have written contracts, indicating little legal protection to their rights.
These are not ideal conditions for the overwhelmingly large informal workers and a very high proportion of temporary/casual workers in the formal sector to even contemplate setting up unions and mounting a fight for their rights.
This was evident during the two-day national strike by workers from across sectors in the last week of March this year. The strike was against privatization of PSUs, protection of their rights diluted in the new labour codes, better social security etc.
Do you even remember it? This was less than a fortnight ago and is already forgotten because the nation-wide strike had no impact. There have been several such strikes in the past two years. One of the key reasons for their failure was the weak trade unions that have failed to mobilize workers and sustain their protests. This is despite all the leading political parties in the country – from the right-wing BJP to the left-wing CPI/CPM and centrist Congress – having their trade unions across the country and all of which have a common cause.
But they protest separately. For example, the right-wing trade union Bharatiya Muzdoor Sangh (BMS) mounts its separate protests, refusing to participate with others by saying that the others (Congress and Left-led) had refused to join its protests in the past. That is what Chandra was pointing at (multiple unions, divided in action).
Neoliberal anti-worker push
Given the universal appeal and dominance of neoliberal economic policies promoting private business interests, which by the very definition of it is anti-worker, it is tough to form or run effective unions and protect and promote workers’ right not just in India but worldwide and the Amazon example just showed it.
Here is an interesting instance of how neoliberalism hurts workers’ interests.
In October 2021, Prof David Card got the Nobel Prize for economics for a study (along with Prof Alan Krueger) conducted in the early 1990s but remained virtually unknown and unacknowledged until then.
The study demolished the neoliberal myth that high wages for workers are against the workers’ interests, as they cause high unemployment. The neoliberal logic is that higher wages raise input costs and make products and services costlier, which in turn, lowers consumption demand forcing companies to cut production and hence, forced to sack workers.
The Nobel laureate’s study, titled “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania”, showed that is patently false. They studied before and after the minimum wages were raised in the fast-food restaurants of New Jersey in 1992 and compared those to eastern Pennsylvania where there was no such raise. The study found “no indication that the rise in the minimum wage reduced employment”. It was found that the rise in cost was passed on to customers. Besides, when checked for changes in teenage employment rates in New Jersey, Pennsylvania, and New York in the year following the increase in the minimum wage, it found “a relative increase in employment of low-wage workers in New Jersey”.
More shockingly, while this study existed all along since the early 1990s, it remained virtually unknown to the world for 30 years!
Imagine, had this been known earlier, the dubious neoliberal construct of high wages causing high unemployment could have been challenged for 30 years, but that wasn’t the case. It was the Nobel Prize of 2021 that drew attention to the very existence of it.
Soon, however, Card’s study would be relegated to history (if not already) and there would be none to challenge the neoliberal absurdities.
That is why Amazon’s workers’ union is all the more significant.
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