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Women Working in Informal Sector in India: A saga of Lopsided Utilization of Human Capital

Authors:

Abstract

The phenomenon of economic development is a composite of several factors, which may not necessarily have economic connotations; The contribution of human resource to economic growth of any country cannot be overemphasized, especially in a country like India which is still reeling under the pressures of its mammoth population and limited capital resource. The Indian economy can well be studied in two distinct sectors, organized and unorganized (informal). The widespread informal sector in the country is a major contributor to its development but at the same time it is plagued by several problems such as no proper service rules, no wage rules and no possibilities of career advancement. Another notable fact is that as many as 94% of total women workers work in the informal sector in India but they have to face gender discrimination which is almost inexistent in formal sector. Besides, their contribution in terms of income generation turns out to be less than their male counterparts, which means almost half of the population contributes to less than half to the national income. The present paper aims at understanding this lopsided utilization of human capital and its fall outs. A small survey has been also conducted in the State of Uttar Pradesh to find the realities. However it may appear presumptuous on part of the author to claim its generalization for the country but a number of similar studies conducted in other parts of the country by other scholars support the contention.
Women Working in Informal Sector in India: A saga of Lopsided Utilization of
Human Capital
Dr. Geetika
Professor and Head
geetika@gmail.com
Dr Tripti Singh
Assistant Professor
tripti@mnnit.ac.in
Anvita Gupta
Research Scholar
anvita78@yahoo.com
School of Management Studies
Motilal Nehru National Institute of Technology Allahabad, India
Abstract The phenomenon of economic development is a
composite of several factors, which may not necessarily have
economic connotations; The contribution of human resource to
economic growth of any country cannot be overemphasized,
especially in a country like India which is still reeling under the
pressures of its mammoth population and limited capital
resource. The Indian economy can well be studied in two
distinct sectors, organized and unorganized (informal). The
widespread informal sector in the country is a major
contributor to its development but at the same time it is
plagued by several problems such as no proper service rules,
no wage rules and no possibilities of career advancement.
Another notable fact is that as many as 94% of total women
workers work in the informal sector in India but they have to
face gender discrimination which is almost inexistent in formal
sector. Besides, their contribution in terms of income
generation turns out to be less than their male counterparts,
which means almost half of the population contributes to less
than half to the national income. The present paper aims at
understanding this lopsided utilization of human capital and its
fall outs. A small survey has been also conducted in the State of
Uttar Pradesh to find the realities. However it may appear
presumptuous on part of the author to claim its generalization
for the country but a number of similar studies conducted in
other parts of the country by other scholars support the
contention.
Keywords-Informal sector, women workers, gender
discrimination
I. INTRODUCTION
Employment in informal sector comprises one half to
three-quarters of non-agricultural employment in developing
countries: specifically, 48 percent of non-agricultural
employment in North Africa; 51 per cent in Latin America;
65 per cent in Asia; and 72 per cent in sub-Saharan Africa. If
South Africa is excluded, the share of informal employment
in non-agricultural employment rises to 78 per cent in sub-
Saharan Africa. If data were available for additional
countries in Southern Asia, the regional average for Asia
would likely be much higher. Informal employment is
comprised of both self-employment in informal enterprises
(i.e. small and/or unregistered) and wage employment in
informal jobs (i.e., without secure contracts, worker benefits,
or social protection)[5].
The concept of informal sector was first introduced by
Hart [2], with the distinction between wage and self-
employment as the essential difference between the formal
and informal sectors. Later ILO broadened the scope of the
informal sector. Informal activities are typically
characterized by ease of entry, reliance on indigenous
resources, family ownership of enterprises, small scale of
operations of labour intensive and adaptive technology, skills
acquired outside formal schooling system, and unregulated
and competitive markets.
The Resolution concerning Statistics of Employment in
the Informal Sector, adopted by the Fifteenth International
Conference of Labour Statisticians in 1993, defined the
informal sector as follows: The informal sector is regarded as
a group of household enterprises or unincorporated
enterprises owned by households that includes:
Informal own-account enterprises, which may
employ contributing family workers and employees
on an occasional basis; and
Enterprises of informal employers, which employ
one or more employees on a continuous basis.
As is clear from the literature the informal sector is a
multi-situation syndrome. It is characterized by non-
uniformity in the nature, characteristics and conditions of
jobs. The informal sector consists of regular workers and
casual labour, self employed and those working for others,
illiterate to semi-educated, in all age groups (including below
and above the normal working age bracket). This
combination of differentiated and distinct characters is more
pronounced when we talk of informal sector in the urban
areas; of a country like India. Given the disadvantaged
position of women in the labor market in most parts of the
developing world, the result of long-standing societal norms
which discourage the social and economic integration and
advancement of women, the majority of female workers are
engaged in the informal sector. This is especially true for
sub-Saharan Africa and South Asia [10]. It is also evident
that female workers rely more on the informal sector than
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2011 International Conference on Economics and Finance Research
IPEDR vol.4 (2011) © (2011) IACSIT Press, Singapore
men -- the shares of female non-agricultural employment in
the informal sector are generally (and often substantially)
higher than those for male workers. But women's
participation in terms of their share of informal sector
employment is more mixed. Recent evidence shows
extremely low shares in North Africa (for example, Tunisia:
18.1 percent) and South Asia (for example, India: 22.7
percent). An estimate by the World Bank shows that 90% of
the women working in the informal sector are not included in
the official statistics and their work is undocumented and
considered as disguised wage work, unskilled, low paying
and do not provide benefits to the workers.
In India, almost 94% of total women workers are
engaged in informal sector, of which about 20% work in the
urban centres. Majority of women workers in informal sector
come from those sections of the society which need income
at any cost. Nearly 50 per cent of these women workers are
sole supporters of their families. Another startling fact is that
out of all women workers a mere 7.5% are availing the
membership of authentic registered trade unions. Yet another
fact to cause concern is that women have to work, unpaid,
even outside home, for some 5-8 hours to help their other
family members. This fact has to be considered alongside the
fact that an average woman has to work at home for some 7-
8 hours doing household chores including upbringing the
children. Most of the women workers lack proper training.
They have very few options to avail as far as gainful jobs are
concerned. The quiet contributors to the effortless movement
of the social carriage, the women workers engaged in
informal sector are poor, perhaps poorest amongst poor,
uneducated and weak.
Various studies by Papola (1982, 92)[8], clearly and
emphatically show another amazing fact that, the urban
labour market discriminates against women much more than
the rural labour market. This discrimination results in decline
in the participation of women in economic activities.
II. CATEGORIES OF WORKERS
The biggest problem with the informal sector in India is
that there is no precise information about the total number of
workers what to say of women engaged in this sector and
also their respective ratios in various diversified occupations.
The Report of the National Commission on for Enterprises in
the Unorganised Sector highlights the existence and
qualification of unorganized or informal workers, defined as
those who do not have employed security, work security and
social security. This universe of informal workers now
constitutes 92 percent of the total workforce.
Whatever data is available is from Census 2001 Report
and from National Perspective Plan for Women, 2000.
Although there is no precise and authentic information about
the total number of woman workers engaged in informal
sector, still an estimate is drawn on the basis of available
information. As per census reports of 2001 regarding
workers and their distribution there are some 60 thousand
women workers under the categories of main workers,
marginal workers and those engaged in household industries.
According to another estimate, almost 90 percent of total
women work force is engaged in the informal sector in India
(National Perspective Plan for Women, 2000).
Informal wage employment is comprised of employees of
informal enterprises as well as various types of informal
wage workers who work for formal enterprises, households,
or who have no fixed employer. These include casual day
laborers, domestic workers, industrial outworkers (notably
home workers), undeclared workers, and part-time or
temporary workers without secure contracts, workers
benefits, or social protection. Home-based workers and street
vendors are two of the largest sub-groups of the informal
workforce: with home-based workers the more numerous but
street vendors the more visible of the two. Taken together
they represent an estimated 10-25 per cent of the
nonagricultural workforce in developing countries and over 5
per cent of the total workforce in developed countries (World
Bank, 2000).
On basis of previous researches and other reports,
following categories of women workers in the informal
sector have been identified:
1. Construction labour: women labour have to work
always as unskilled labour carrying construction
material on their heads to the construction site,
while the skilled/ semi-skilled work is done by men.
2. Domestic workers: this category of employment
goes mainly to women, especially young girls. In
1997-98, there were some 1.68 million female
domestic workers, while the number of male
workers was only 0.62 million. The household
workers include part-time and full- time workers.
3. Garment workers: these women work with some
big drapers, boutiques and stores; here too same
bias is evident that the women work as helpers to
male tailors (called as masters). These workers
include those involved in knitting woolens.
4. Vendor: this is the most scattered category, which
includes women engaged in selling different types
of commodities, like broomsticks, cane baskets,
utensils, petty cosmetics, bangles, vegetables and
those running roadside tea stalls, etc. Nearly 40%
of total vendors are women and 30% of these
women are the sole earning members in their
families.
5. Sales girls: these workers are further divided in
two categories, one, those moving from door to and
place to place, other, those working in shops
(mostly women related items like jewelry,
garments and cosmetics etc).
III. THE SURVEY
In order to get a deep understanding of the phenomenon a
field survey was conducted over a period of six months in
the selected cities of Uttar Pradesh, which is the largest State
in India. Women workers engaged in various occupations,
such as, household work, construction work, garment
535
making, sales and other were interviewed through a semi
structured questionnaire. These workers were interviewed to
understand following aspects of their occupation:
Reasons for taking up a particular profession
Terms and conditions of job, such as job security,
leave, other benefits
Wages, whether daily/weekly/monthly; certain or
variable
Discrimination on basis of gender
Personal information, like age, marital status,
education, family income
For collection of information semi-structured interview
method was adopted. These workers were contacted at their
work place such as construction sites and major labour
centers of the city to get a feel of the conditions of women
workers engaged in construction work. To survey the
conditions of household workers, the group habitats of these
workers situated in various parts of the city were visited. In
these habitats we also came across some petty traders as
some of these poor women have been found to prefer to sell
vegetables or run petty shops of miscellaneous goods near
their residence instead of working in the households. The
women traders sitting at the roadside and selling variety of
goods were also interviewed. It was not an easy task to
contact the garment workers and sales girls, as they normally
do not gather at their work places. We could reach them only
with the cooperation of middlemen who provided them work.
A total of 240 workers were surveyed, including 65
domestic workers, 50 construction workers, 42 sales girls, 40
petty traders including vegetable vendors, and 43 garment
workers. Since the sample was theoretical sample and could
not be used for the purpose of statistical analysis, besides the
information was collected on basis of unstructured
interviews therefore qualitative analysis has been adopted to
reach conclusions.
IV. FINDINGS
The survey tool was personally administered by the
investigators. The guided interviews results are summarised
below. Women seek jobs in informal sector because it is easy
to enter this sector. There are little or almost insignificant
barriers of skill, training and other formalities in the informal
Sector. This sector provides an easy source of income to the
unskilled and uninitiated women folk of our country. The
women workers continue to work in the same unit or same
category of work for the lack of knowledge of a better
alternative or most often lack of enough initiative to move
from their familiar atmosphere to absolutely new field. All of
these women are doing this job to supplement their family
income barring a very small percentage who manages their
livelihood from this work. The results of the survey are
summarized in Table 1 to give a bird’s eye view of the
situation of women workers in the informal sector in the
urban areas. The table is drawn using the main research
variables and the categories of respondents. A detailed
analysis of the findings follows thereafter.
TABLE1. PROFILE OF WOMEN WORKERS IN THE INFORMAL SECTOR
Variables
Category
Reasons for a particular
profession
Terms and conditions of job Wages Discrimination on basis of
gender
Domestic Workers Only job available near
their residence
Economic compulsion
No other skill
No defined rules;
Increment in wages/ fringe
benefits only when working for
long period
Negotiable
Wages not enough to
satisfy bare minimum
needs
No discrimination
More preferred against men for
household jobs
Construction
Workers
No land
No other skills
No other options
depend upon local contractors
for work
no regularity or security
of job
disparity in wages and in nature
of work
Ill-treatment and harassment at
the hands of contractors.
Garment Workers low middle class who want
white collar jobs
Can work from home
No significant information Work based,
(commission)
Negotiable /Arbitrary
No incidence reported
Petty Traders
/Vendors Find pride in being self-
employed
Self-employed Uncertain No incidence reported
Sales Persons Economic compulsion
More dignified
very tedious and also involves
risks of personal assaults.
Mostly work based,
(commission)
Arbitrary and low
No incidence reported
V. ANALYSIS AND DISCCUSION
Following is a detailed analysis on the findings of the
survey which includes observations of the researchers while
conducting the survey:
A. Domestic Workers
The domestic workers are engaged in particular
profession, since it is the only job that they could
find near their habitat. All the workers feel that the
wages are not enough to satisfy their bare minimum
needs but they continue to work since they could not
bargain for more. In most of the cases wages are
negotiable.
Another interesting fact which emerged was
formation of collusive arrangements among workers
since in the survey wages differed on basis of
locations.
Wage discrimination on basis of gender could not be
ascertained in this category. Instead a fact that
536
emerged and that was in support of World Bank
findings was that women were more preferred to
work as domestic help as against males.
Increment in wages and other benefits are given only
when the person is working for fairly long period. In
some cases some workers are found to be working
for more than 10 years but mostly the period ranged
from 1-3 year.
Another significant dimension that emerged was
significant amount of non monetary benefits like
food, clothes, gifts and tips on special occasions and
by guests.
B. Construction Workers
The construction workers normally are migrants
coming from nearby villages. They depend upon
local contractors for work as well as wages.
There is disparity in wages; men are paid more than
women.
There is no regularity or security of job.
Almost all of them complained of ill-treatment and
harassment at the hands of contractors. There was an
indirect hint to sexual harassment in terms of
language and gestures.
Some of the contractors were asked about this
complaint and the single most important reason cited
was difference in physical strength; that female
workers do less work than males during the same
duration.
C. Vendors/ Sales Persons
The survey women included the sales girls at various
showrooms and shops as also those engaged for
direct sales. The job of sales girls moving from door
to door is very tedious and also involves risks of
personal assaults. They prefer to visit the targets
during day time when they can be sure of their safety.
The mode of payment in this profession is mainly
work based, which they call commission. This
commission is unbelievably low and arbitrary. These
workers have to contact a certain minimum number
of persons per day to secure that commission. The
commission varies from product to product. There
are no uniform norms of commission rates; it is
unusually in absolute terms and not in proportion of
sales. This commission could be range from a
meager Re. 1 per person contacted to 5% of total
sales.
Those working on shops earn on monthly basis with
better emoluments and greater job security.
All of these workers were educated till secondary or
higher.
All of these women reported the need to earn to
support family needs such children’s’ education and
daughters’ marriage.
D. Garment Workers
In the case of garment workers, those working on
their own were in better position as they did not have
to be commanded by someone else. But majority of
these workers were working as helpers to a big
draper. They receive payment on piece basis and this
payment is so paltry an amount that one cannot ever
dream of depending a living on it, although they
have to work for five - six hours per day. The best
return after one day’s work can be Rs. 70-100.
These workers mainly come from low middle class
who need to support their family income but do not
want to be bound by workers’ category.
They want to work from home in their free time and
receive a more dignified treatment. In fact these
workers could be contacted only with the help of the
big tailors, boutiques and readymade garment
showrooms.
E. Petty Traders
These included those women who are able to
manage their own profession, whether as vegetable
vendors, basket weavers, broomsticks makers, or as
owners of road-side food joints.
They are in better condition than their counterparts
in other professions due to self employment nature
of their profession.
They can work on their own terms without fear of
exploitation by employer or middlemen. The
monthly earning in this case was found to be
reasonable as compared to other job categories.
There was a special sense of pride among these
workers which was completely lacking in all other
categories. They even indicated that they would
never work for others for whatever reason.
VI. CONCLUSIONS
The women workers do not have a choice to work, or not
to work, due to dire need of income. The limited
opportunities available to women are mostly low paid, low-
status jobs in the informal sector; jobs which do not have any
possibilities of betterment, advancement of efficiency or
training, to enable them to enter better jobs at a later stage. In
the overall state of unemployment and lack of opportunities,
women hold a secondary place to men in the race of
employment.
It has been observed that women find it difficult to enter
the structured system of organized sector. It is also found,
that there is no economic reason for paying lower wages or
giving only a particular type of work to women workers.
When they work for themselves, their wages and work is
quite comparable with those of male workers (For example
in case of vendors).
There is discrimination in wages, nature of work,
availability of work, on the basis of sex. Bargaining power is
mostly with the employers, so exploitation is naturally the
fate of these poor workers. They come from that section of
the society which must work to earn their livelihood and
537
which is socially, economically and traditionally backward
and least privileged. There is diversity in the nature of work.
Some of them are construction workers, some are domestic
servants, and some others are garment workers while few are
petty traders in miscellany of goods. But there is little or no
variation in terms of job like wage discrimination, job
insecurity, leave / holidays and other benefits.
The society has to meet this challenge. It is difficult but it
has to be done. It has to be done in the interest of the country
because the National Income consists of incomes of all the
persons and if half of the work force is forced to earn as low
as two third of the other half, the ultimate sufferer is the
economy as a whole. A very large proportion of women
workers admitted that if they were given some help from the
government in the form of money or training or machines
etc., they could also have a more honourable living. . A ray
of hope has emerged in the form of Self Help Groups some
of which are working in this area as well. To mention the
most prominent a reputed group is Self Employed Women
Association (SEWA), which is working to organize the self
employed poor women with an objective to make them fully
employed. A detailed discussion is not done on SEWA as it
is out of the purview of the paper. National Commission on
Enterprises in Unorganized Sector is established by the
Government of India in 2004 to frame rules and regulations
to safeguard the interests of workers. The outcome is yet to
be seen.
It is strongly recommended that mere framing of policies
and Acts may not serve the purpose. Work has to be done at
the grass root level with proper feedback system in place to
ensure that policies of equal treatment for equal work are
actually giving results. We must remember that by ignoring
these women workers we are ignoring important contributors
to national income of the country.
REFRENCES
[1] Blunch Niels-Hugo, Canagarajah Sudharshan and Raju Dhushyanth,
“The Informal Sector Revisited: A Synthesis Across Space and Time”,
Social Protection Unit, Human Development Network, The World
Bank,20001.
[2] Hazt,Keith, “Informal Income Opportunities and Urban
Employment in Ghana', Modern African Studies”, March,
1973.
[3] ILO, “Employment, Incomes and Equality:A Strategy for
increasing Productive Employment in Kenya”, ILO, Geneva,
1972.
[4] India: 2008, Government of India Publication Division.
[5] Women And Men In The Informal Economy: A Statistical
Picture, Employment Sector, International Labour
Organization, Geneva, 2002
[6] Piore Michael and Sabel Charles, “ The Second Industrial
Divide”, Basic Books, New York,2002.
[7] National perspective Plan for Women: 1988-2000,
Government of India
[8] Papola T.S., “ Industrialisation for Rural Development”, in
Singh, A.K, Papola T.S. and Mathur, R.S. (ed). Economic
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[9] Primary Census Abstract, 2001, Government of India.
[10] United Nations (2000), The World’s Women 2000: Trends
and Statistics, New York: UN Statistical Division.
[11] Visaria, P., and P. Jacob, “The Informal Sector in India:
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Globally, black and minoritized women are subjected to gender-based violence which is compounded by their intersecting oppressions based on gender, race, faith, caste, geographical location and more. In the context of the #MeToo movement, some women are left out of the conversation, silenced or self-censored due to fear of their entire ‘communities’ being judged. Notable by their absence, minoritized women’s experiences of violence, often characterized by the influence of state violence, structural racism and poverty, are seemingly not centered in the dominant definition of violence within this burgeoning movement. In this chapter, three black feminist practitioners ask what kinds of violence #MeToo is enabling women to call out. Presenting perspectives from different country contexts, the authors examine the ways in which structural responses fail minoritized women and ask what happens if and when minoritized women say #MeToo?
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In line with the recognition of the significance of women in the path to development, various countries have sought to increase female labor market participation over the past decades. While many European countries have been successful, numerous Asian countries have failed. The purpose of this study is to compare the patterns of female employment in three Asian countries since the 1990s including India, South Korea, and Turkey and to discover the main determinants of the issue. Female employment is a multidimensional concept that should be evaluated from cultural, economic and political perspectives. The study thus adopts a broad perspective containing cultural, economic and political factors in different nations.
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Fashion has, in its own way been a major agent of change in today’s world. The feminization of the labor force in the garment manufacturing setups also covets for the change in the areas of workplace safety, gender empowerment and equality. With such a large number of female apparel workers of mid-age who may become pregnant, a realistic recognition of the unique needs of the pregnant worker is beginning to emerge. This research explores the problems faced by the pregnant workers and identifies the problem areas as large abdomen causing progressive postural problems, backache, impairment of dexterity, agility, coordination and balance. Interviews with expectant workers led to a realization that majority want to work till their third trimester. They work continuously for around 4 hours a day. Most felt fatigue after 1–2 hours of working. Nordic Discomfort Questionnaire analysis resulted in high discomfort scores in lower back, foot, upper back and shoulder in the descending order. REBA (Rapid Entire Body Assessment) established that pregnant workers for operations of inspection, thread trimming and packaging are under very high risk and need change in workstation from standing to sitting. Work stations designed for them, have a table with a 10° inclination and an oval cut in front to accommodate the abdomen and a chair with rocking base having shin support. Both were found comfortable by workers.
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The concept of the informal sector (IS) has recently received widespread and growing attention. Indeed, it may be fair to talk about a re-emergence of the concept in the debate related to social protection and poverty reduction. We argue that with this new found prominence, it is even more important that we better understand the IS. Only with an improved understanding of the issues and dimensions of the IS can we design policies and programs which effectively address the needs of workers engaged in informal sector activities. This paper is an attempt to contribute to such an increased understanding by highlighting important pieces in understanding the concept of the IS across (1) time, briefly discussing how our view of the concept of the IS has evolved over time and (2) space, presenting empirical evidence and stylized features across regions. After presenting the current state of knowledge of the IS, we distill key aspects and issues of the IS and discuss their implications for policy design and implementation, especially in the context of fighting poverty and improving livelihoods of the poor in developing countries.
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This article originated in the study of one Northern Ghanaian group, the Frafras, as migrants to the urban areas of Southern Ghana. It describes the economic activities of the low-income section of the labour force in Accra, the urban sub-proletariat into which the unskilled and illiterate majority of Frafra migrants are drawn. Price inflation, inadequate wages, and an increasing surplus to the requirements of the urban labour market have led to a high degree of informality in the income-generating activities of the sub-proletariat. Consequently income and expenditure patterns are more complex than is normally allowed for in the economic analysis of poor countries. Government planning and the effective application of economic theory in this sphere has been impeded by the unthinking transfer of western categories to the economic and social structures of African cities. The question to be answered is this: Does the ‘reserve army of urban unemployed and underemployed’ really constitute a passive, exploited majority in cities like Accra, or do their informal economic activities possess some autonomous capacity for generating growth in the incomes of the urban (and rural) poor?
The Informal Sector in India: Estimates of Its Size, and Needs and Problems of Data Collection
  • P Visaria
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Visaria, P., and P. Jacob, "The Informal Sector in India: Estimates of Its Size, and Needs and Problems of Data Collection", Gujarat Institute of Development Research, Working Paper No. 70.
Employment, Incomes and Equality:A Strategy for increasing Productive Employment in Kenya
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Industrialisation for Rural Development
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Employment Sector, International Labour Organization
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