Chapter 3

J.' lnChlsmAl. StbCtuml on4 L@bou£ Mal'ka&a

The links between education an4 emplojJD.ent is

established. tbl'Ougb 1abour UlSl'ltBtS. In tact the 1abour

market can be seen as an lnStttuti.on Wb1cb med1ates between demand l'or and. supplJr or manpollel'. In ~ process 1 t

cbaanellses the cutputs ~m the eCblcaUOnal secto~ to the

other seetol'S of the eooJ1Om1. Ifn¥ <UsCJ9pan07 between tbe

out)Nts of the ecblcat1onal. sector end the demand fol' them as 1Jlputs b7 othel" sectors iB re.fl.ecteCl in labour mar.ts

Ul the fo. of surp1uses or 8bol'tege8.

the stn1ctuJ'e end nmot.1OJdJaa or l.aboul" markets a_. 110 doubt, wlo.teCl to the economlc oondiUcns o~ proeucUon. fbe behal'1our of leboul" mOl'kets. in tact, l'efl.ecta t.be

1 mod tundamental Pl'OC8SS of plOdUCUon ltself ano the bItt-

tutlOIlal. enanpments govemJaa p~(1\lctlon. Accor41D81y, labour martat .f\mctS.oDirlS changes W1 tb a Change in the

1Dtemal pzodllctiou p1'00888 1D ttle economy. fhe change .fll)1D COJ'llPGUUVO to sepented 1abour mark$ts can be COJJre-

1ate4 to conespon6S.Ds changes in the ecoDOm1c spheze.

.. 1lt -

In the previous chapter ve have noUce4 tb9 1mportance of the op)ratloll of 1abour markets s.n deteftalDS.rlg the ~ob

catelOl7 anCl the~by \he esmlngs of an inciiviciUal espeOlal17

under conUt1ons of Smpell.feotl.y compot1~i.ve labour mtU"kets. ib.e &tl'Uctu.w of 1aboul' mal1mts aac1 th3 b1n.ng poUci.es

followed the~ are c1osel¥ relate4. ~e shaU now tum to

tb1s lsl.ationsblp and d1seuss holt the toms of 1aboUJ' marie ts

may lnj'luence bS.nns pl'8o~ices followed b7 emplo~1"S in the

conte'at, espee.1al.l)1 of 8 develop1q eco~.

EaI'l1er pan of this Chapter Will. deal nth labour

markets 10 general ancl1atter put WU1 deal With 1abour

market con<i1tions 1D developS.na economies. AS a 1en41ns exemp1e. we shall. am in sections ) • .3 onlfudS to Indian

a case. Such other COlmtr¥ stud10s as are ava1l.able wou1d

SUSb'GSt 'that the IncU.611 experSBnce :recounted bsl.ow 18 fairly

replesentaUve •

3.a e=tt .LOWI tluMt;S, ~QlUI»1ila J.DlXU&E

the c1assica1 economlSts, 111 oonfo-tJ' wltb their

ass~Uons of pen'ect coupUtion and ftrl1 emplo_nt,

• 75 -

conslc1ereci ~ markets to • oJ)en and COJIQleu'UVG, and

so a1.so l.aboUI" markets. ~o them, 8Il¥ deviation or the'

market from equ11lbl'1um pos.1t1on ass onl¥ e tempol"nl7

aberration. The market woul.<l be bJ'ougbt back to equlUb.

rium b)7 the forces w1tb1n the s18teJn. And wage-nezlb1lS.ty

can be used as a mechanism to KacU.1tate this process or equ111bnum. It was again noted that any dlttsmnces 111

in t.b1s mprCl ansa out or the inertia of the market mecben1ams to msponc1 and pro~ce right s1gnals at proper t1me It ihe*'ore, under this scheme, adJustmont of market meChan1sms wele automatic 1>3 the 1ntel"p1ay or forces of demanc1 anci supply. rbe ~ot1on6 ot labola markets we" ecnftne '" to;

(a,) matcb1ng wor1fers Wltb ,30bSI end

( b) t1s1Da the prices 0 g 1e.boul".

Since vage.nGibJJ.1ty vas peSlUtted. pnees of 1abour we~ al.wQS invene1y 19J.ateCl to tbe quantity of SUPp17 o~

l.abour ava1l.able in the mn&'ke t. l' j.S to be IlOte4 that 2. t wee also a per.iGci of

eompeUtti.ve capitalism in tile plOduOUon spheh, whereby

the 1nnuenee exerted by ~ stngle iDC1iv2.dua1 to altel' the 1\mcu.onSaS of market was lJm1ted. ''''.oxeowr. S1nee d1fi'eren-

Uation of J.aboul" un1ts WGre not ~t~nsJ.3 recognSned t the

a4Jl13tment mecbsudsms used to operate set1s1"actol'Uy.

- 16 -

SfifllllW\.Hd, ,LabpH 1:1sMt{L

In the eaJ"13 C1ecaees of the present century it was no_", espec1a U¥ in Amel'1CaD econom;y, that the phase or compeUUveness in tho procluctl.on Sph9mf as it exJ.sted

earllel'~ wile <lj.sappeal'1llg. %he emergence of corporate sectors rep1.aC1ng relaUvel.y small. sj.ze .t'1JtD.S substaDti.aUy

chansed the pn>d:UCt1011 process ana 1.t was ~noc~u in

l.abour mal'keto also. the emergence anu cbmirumee 01" corJ,O-rate sectors 1n Pll)WOt.101A spbel'G me-red the Leginn1ngs 01 bu.nlaucl'Bti.o enterprises. Ita wtl.eet1or. in lebour marlret vas notleeab3.e. Jobs beoemG lncmBs1llW a.1as1mUar and ns a mault labour market abolm4 ten<1enC1.es or sepentat,",on. Later tbese t.en~Jle1es ve~ inst1tuUona11sed by emp101C.l'S

and tbele cane into Gistence sesaente.a 1Qbour market$. I l' iF

- 1'1 -

Accor41Dg to tts theoJ7 of l.aboUl" mal'ket 8e811entaUon. l.aboul' mal'Jr.eta 8ft dlv1.c2ed into two 6S€P$nts ... pnma~ 04

secon4al7. fbe pnm&rY sector 16 41S~heCl fi'om the secondal7 seotoJr 011 the \)&.S18 of ,he 4ltferenees in tM con41t.ions of emplolllSnt m4 wages. Genernll.y pJ1.mary

secto~ 1S CbaI~cteft.Se(l b)" bl8ll wage.; I'stes enc1 stable emploJULGnt oon41t1ons. In tbe secon<la17 sactor wage rates ale low and emploJm'lllt conUt.1ons unstabla.

the increas1rig dUterent1aUo» of .1obs Bub-41n<lec1 the

labourforca 1nto l'lOn-tlomOgeneous anel non-coQaUUve groups. Tld.s ~up1.ng and ra-asnentaUon of l.abour tone into segpBnted

catGsori.es tacd.lJ.tate4 an eas,- exerc1se oK contJ'Ol. over them bl empl.oyel's. Bl'teotive methodS of cont»o1 were 1ntroduced. especl.all.I' 1n PI"imaJ7 segments, tbrouab h1€P1Y SGpbl~catecl moChanismS. iJle emergenee end. contlnuenco of bierarcb1cal stNOture of 30bs and the poSS1bU1tLes of p!'OlDOt1ons to those who adhere to l'Ules cm4 resulatlons of tbe ftl'ms acted

as a J'eJ.i.able method. to dlao1p3J.lle tbG alseat'b se_ntGd

l.abourrorce. In otboi' words. comSJig up of the tntemal , l.aboul'ma1irets VS,tb1fl a b\1nauel"at1o ente~r1se pxovide4

F •

- 78 -

adequate scope tor the easl ~cUon1ns of U1e segmentation

pft)C0SS with cons1derable control on the workfon:e. 6

fhougb tIE 'ports of eDt..,. are open, any 1nd1v1dual

who gets into a .lob bas a deflD1te advantage over Me counter-'I

parts ln the 'external l.abour markets' wbich acts as a c11s-

1ncenUve to leave the .1obs. rbe .1ob-spec1flc sk1ll.s Smparted to IWD by the emplo191' furtber aeduees bis chances

of l.a~1'8l mobU1ty and thereb7 bie barga 1ld.ng poYer With

the emplo,e ...

In tbe late .. versions of the labour ma .. mt sesrnanta-

t1.on theol7. it vas shown tbat the dlv1fd.on of labour merEts 1nto pnmary end sec:on4a17 sesnents as per the 8B1"Uer

verslons can 1\1rther be sub-divided. ACCOI"CUngl.y, the pl"Smar1 sector 1s d1v1ded into two. some call. it 'independent and

8 subordS.nate se_nte' and othel's c~ lt 'upper and lower

6. Peter D. lJor1nger end ~lchael J. Pj.ol"e, Ap.St.

'I. Internal. labour marlsBts 1n pracUce operates after one gets lnto a ~b Whele promoUon poss1bUJ.t.1es exlst. Gener~y 1.n dlscusss.ons on 1ebour markets ve ret'er to extel'rla1 l.abour marlets. The exS.stenC8 01 1ntel'l1a1 l.abour markets in a t'U1n lnfl.uences the l'8~renent poUC)¥ followed. by the em~~r. The prospects.ve emplo¥8es am al.so equal.l.y conC8l'1l9d about the1r pl'OmOtt.on poss1b1UtS.es 10 Choos1ng &n7 ~ob.

8. h.C. Edwards etc. (eds.) gpeat., see Introduction. pp. xv..xvl.

• 79 ..

9 t1ors.' tb1S 41&t1notion was 4ravn on the basis of the cleSree of independence one 030)'9 111 takins deCisions and

the extent of manaaement contJ'o1e tbat one can exeh1se. IndlVldua1e emplo)1ed. 111 upper tiel' are better pl.aced 1D this

re~d and 111 t!lo nl.e cUon p;oCWSSt Gmpl.o,era l.ook for tralts cclldUo1va for such qun11t19S.

3. J l)JmtAsmnm~r~..ApAas&!'.t.M s~rwrcum H\..J!l~

fhe peeul1er fe8tu~ of InGitm economy is its mixed natul'G wham public and pdvate sectors eo-e&:1st. SlnCG

emergence of a l.a~_ public sGctor 1s e rel.at1w1y seCllnt p.benomenon (S1G1lU1centJ..y post-indapend8nce) t a. b1story or devel.opmont of Sndustn.a1 stlUCtlU'8 .In Xnata becomes, 1arge1.;v,

10 a b1sto'7 of pnvate cor,pol'ate stzouotul'e.

~ dsvel.opuent 01' s.ntbisU1a1 sPUCtui'e 1n India s.s <l1ftelWlt f~m tIlat of tile western C\)UJltl'1es. WasteI'D

CGUJltr.les 11£ 'Clrtease4 8 »en.o4 oK 19h'j,wl.y UIlUsturbe4 trans-

fOIln8ti.on I~m pre .. inCiUetne.U.secl s~ge to a peJ'1Q(1 or COlQP8titlve capJ.talJ.sm unel ,-..om there to 8 stage of (!Dl9Z'gence

o~ col'pOl'ate sect.o%'s. 10 the case of .india the emeJ'pd J •

.. 80 -

s.n~8trs.al. stlUCtul'$ vas exopnousl.y super Sm,posed on the 11

then ex1st1Da 'pre-capital1st' mode of ~dUCt,J..oD. ~tol'eOver,

the existence of a vil.l.Gp comamlty B"stem based on Hindu

beJ,lefs. coste stlucture, 14eo1og and 1ntel'locld.na tamlly S1"stem l"eilltorceCl social SuImoblUty end oceupaUona1 n&1c.U.ty.

ttbi.s social or4e1' was ~s1StaDt. to economlc modemis8~J.on

and tbszeb7 to aD tndependent oapJ.taUst mode of prodUction. fhe coming of Bn611eb East India COJr3)aD¥ anti the

1rltl.ov of Bnt1ah capital. to Indla destl"oJ8c1 her thd1Uonal

1ndUstl'1es. Moreover. BrlUsh cap1tal. was by and 1arge

concentrated 011 the three p~vtnce8 .. Benga1t Bombay end MaCira8 - of British Ind1a. the Indian buSJness oonmnmltles

in end al'Oun4 theae PIOVinoes in CQoparaUcn wAth British

capl tal 1~4 tIl8 .tOUlldaUoDa of modem .s.n<i&a8t~e1 stl\lctuN In InC11a. C8J"talD caste and. commUllit1Gs tcok ir4USUve in

tbS.s pl"OC8s s snd tbe, beoema leaden or In4t.an lnClustl'181

c:olJilZi\ld t¥ • •

pre-cap1taast is tile teDl "Il8raUy us.A to Cienote tbe p~-sle~ mode of production In India. :rile esaen\1e1 '.stun. ot such a mo(1e of proCl\10U0n verea (a) production was centnCl uound the bousebc14s, (b) dil'ect plOda1cers Nta1Jled 1'000&ss1on of means or

PJ.'Oc.1ucUoD, ene, (c) ~be m1atS.ons of production wah este.bUshe4 b7

m1aUol1a o~ depenctGnce eancta.t~ed by nUS10us J:d.er·~h7 confiniq v!.tb1n tb8 J.1mlts or caste Uv18ions in 8ocWtt".

Br181l Dave.Yt I.CpDP~ tyeJQmsnL~' InMfb spokesman Books, lSott1llSbam, 1 1 t pp. lJ-l • Rana~l t lJasgupta. ~!Pl:ms a.( ISDnomW :EEMS3at UDI 1ruU.@P Case SWAX. lis naJ. Publ.1.shers. Cal.cutta,19?O.

- 81 -One 01 the d1st1ngu1ahJ.ns featums of development ot

lndustl'1al structure in Ind1a vas the emergence of the manag1ng 13

agency system. l'hougb the system was actuell.y introduced

by Br1~sh to overcome their l.!m1tat.1ons 1n COIDm9rc1a1 BcUn-

t1es, in practice. the f\mc~onUlS ot the system resemb1.e4

to tbat of an extension of the ex2.St1ng 30lnt tBmU.7 set up.

The partnersb1p members were most.ly l'91at,,94 by b100Cl or caste;

even the asS1stance employe4 wale very often '-rom sSmUar ,4 backglbunds. :rho funcUon1ng of tbls system effected the

pattem of 1ndLlstdal deve10pmGnt ot InCi1.eu

(a) the emergence of an lnteSJ"Sted bul'9sucrat1c admir4stratlw 15 stlUC~1'G at 1east amons the leacU.als manas1n3 agenoy fUlns; and,

, .... 15. Lokanatllan notes that "the most st.r1ld.1'lg tb1ng that

emerges flOm a stAld¥ of the organl.sat1on ~ the of1'1ces or the 1eadlng manas1ng agenctes' f1.llDS 18 that 1ndWJtl')' Ul lDcU.a is lnteSI'ate4 10 its administrative aspe ct. as opposed to mel'e tec:bJ4ca1 management. The central. oggs-co o~ \tl9 every managing agency UI'!D bas severa1 f1Spartments ol'gan1.sed ~lrst on the Unes of tAte 1ndwl try and secondly 10 I'8vpec~ of secti.oD wi tb1D an 1od\;Btryn. p.a. Lokanatban, I,ndugt.aet Qr&PW,"QD .1,9 RBt George Al.lIiJn and Umd.n Ltd.., Lon 0, 935, p. •

- sa •

( b) tt4s zesu1te4 10 a peculiar pat.teI'D or 1ndustnal

deVel.opment in In.a Wbel'eb7 l.arge papol"ttons of private cap.1ta1 investment VOft concentrated w1tb 1n ttl! conthl 01 a gl'OUp of business houses be~ to e number of

" sub-caste 3l\)\lps.

its pes t-Wol',ld war 1 pel'104, espeC1a1J.y atter the

adoptioa of tbe poU07 oj' di.scnmlnative tariff pJ'Ot.ectlon towar4S Inc1len industries, wes a per10d 0: prospel"1ty tor In<l1an m4us'l'1es. ~'l'Cm the 1a~ ttbirt.1es oltWal'ds Indian

bu8.UleSS hoUSes stanad ~rov1ns tbeU' share of 1nveotment-s 11

in papon3.0n to tJl8 BJ"1tlsh capital. in lnUe. 'lb.1s meant

tbat, b,. tile t.t.IIB InCl1a got her pol.1Uoal Uide18ndOnce, the

pdvate COl'J)Ol'ete sector was r11lDl.7 rooted 1n tho Indian soil. 7: .. post-1&l<W},"enc1ence era witnessed the SimUltaneous

~wtb of ptbU,c end. p1'1vate secton. fbe co-EQtutence of two sectoJ'S d14 not alter \.be stlUetul'Q o~ pUvate enter-

priSes. III pJ"act1ce tile J)ublic seator acted as a leverage 18

and be1pe4 the 9'Owth of tte pl'1vate sector. the 1nonBs1Dg • • I d I'

• 83 -

concentl'ation o~ oa.p1 ~ vJ. thin some business gl"Oups or muses cont1J1ue4. In other wOl'ds, the process of concentra-

19 tiOD of econom1.c pover conUnuecl to ex1.St.

to sum up, the eaogeneoUSl; super-imposed 1nciustr1al otJUoture on a relat1vel.7 backward colonlal economy in its

process of gurthe:r development sbowec1 tren(iS o£ concentra .. Uon oi' cap1tel f:rom tbE) days of lts 1ntanoy 1tael.f'. XIS

emergence of managtns agency sastems and the concept of mSaed eCOllolIlJ' and 1 ts 1\moUoD1ng 1n the post#-1nClepen4enca

pel'104 contr1buted to tbls J)lCcess. fb.1B process of 4eve10p. ment bad 1 ts impacts tOI" the ciewl.opment of labour markets.

3.lt- Lelam1EJ1.9£la'?m D'I\42-& A modest attempt to tnee the trendS in the 4eve1opment

of 1ndUstrial stnlct\ln! in Western ccuntn.es and 11'1 Ind1a was macte to sbow that, deSpite tbe ci1tferenoes 1J\ level.s end pattenuJ or aevelopment 10 these two t)'PeS of economies.

tbah weze men~ factors common in both. SimUarl¥t it can be ahovn that the devel.oplBnt of labour marksts 10 India

eshlb:1te4 maD)' o~toms of cU.etol"Uoll8 whlch WGRl common to tbose !.n the 1D4ustrAa11se4 countnes. Papo~a notes that "d1t'i'elences tetMesn IntUan 1obour markets and 1ebour

.. sa.. -

ma~mts 1Il develope4 countl'1es 819 not of essence but on1¥ 20

of ~il'een. However. tb1s 18 not to beUttle tbe degree ot 41tterences between tale two economies end theu 1abour

marEts. Labour ma~ket stud1es 18 lnUa are at its 1nt8l1c)p and

tbezefol'e. then bae been 1ack of s7stemat1c infOJlDation 21

and snal.ys18 on labour mara ts 10 lnc11a. The 1ack of l'equizeci 1ntol1llat1on leadS us to speculate OD the 1ebour

market process. GeneroU,. most of ~be studies attempted t.Ul. date ma1nl7 concentrates 01'1 emploJlllent trends, o~cupa-aa tlonal. pattern etc. of 8 pal'Ucu1ar I'eg1on. 7:t4s was also

pSI'tl.7 because of the 81JGcif1c J'18turo of .labour markets in

India. fhe g~vth o~ 1aboUJ' marbt in In<lla close1, followed

23 the dewloPJl8nt ot iDduatnal structure. i1le pattern of ,

20.

22.

- 8, -<!evelopusnt of tndustl'1a1 stl'Uctul'O paved tbe way for the

emergence of in4Wltl'1a1 enc:Laves ill seoarapblcell.y closeCl

repone. Tbe l.abour mobU.1t¥ and tbel'Gby tree noll of

labour 110m reSion to othel' wen not GO common. therefore_ the possJ.b1lS.tJ' of s1Jmll.teneous ulswnee or SUl'p1usee and

sbortages of l.aboul' between ClUterent JeS1ons. whioh shoved the BJ..gns of me1'8 l.ocaU.secl 1abour markets, voze no~leeeble.

Papola note. "the s1m\lltaneous perslstence of labour surpluses sa well. as 1abollr CSOflc1t areas in tne country 1nUcates

24 that markets are more Deal. anti l'egional tban national". lhi.s was mo~e SO in tbe case of l.aboUl" markets for 1esB

educated. this sboWS the blab1¥ localJ.sed natu%e or Ind1aD

labour mal'ketsl "It is Vleretore quJ.te otten beUeve4 tbat the 1abouzt mSl'kets 1n India are of td&bl.Y locallsed and

enc1eve4 character, tboUSb ev1<Jence to sup»ort such contention 2' 18 l.acJd.nstt. This l.oeal""ec1 an4 z-eSionel1soCl fUncUon1Ds

of 1abour IJUil~lIDt "boWs possJ.b1Utles or eamiftg and b1ftng

c11ttewnUals wblcb IlQl not be reasonabl7 Gp1ained with

the help of ta-aditlonal losle of compiUtiveneas.

However, gra(b,ualJ.7 tb1D process became 1ess and less

1nfl.uen~a1 basJ.call¥ because of tbe tendenOJ' of the educated

to migrate to the uacban e.~as to seek 30bS 111 uRan 1ebour markets. ~b1a leCl to the emer&ence or wider 1abour maJ'kets.

aa.. T .8. P apol.a. 10m-ill LAbguE "HIsel. 1968 t U.c3.t. • J). 1179. 2'. x.s. Papo).at & K.It. 8ubl'am~am • 191', M"cl~.t p.7.

.. 86 -

"«the evld.ence of SJ'8~a1 bxeald.ng of the barrie" of

seo&ra,pblcal mobW,tg sussest evol.uUon of a nationa1 ,,2§

.labour market. rhO mergence of market irlformation 87stems.

funcUonill8 01' emploamen t exchanSeB and the legal, necessit,-of aclVel"~lsing for ~obs 10 the ll8Vspapel'S added to the

pft)eess of mokiPs labour maJ"lrets &on b1'OB~baaed by fac1l.1.-tatlDs 1Ilter-198lODe1 mobUit¥ of ecmcato4 1.abourfo.ce.

The st,wctuft of .labour mal'lsets 1n lnC11a reveal two

factA>rs& (a) 1Qbou~ markets wen hlgbl.¥ loeal.1se(4 end

EJb) there exJ.stec1 Clua11ot1c natuZ'e between rural anCl urban

alOes. ltural 1abouI'ma7kets ow 8eJ.W1'el.l¥ chal'actensoti b7 low wages and less mobU1ty tor its workers. )1oreovol".

in l'Ura1 a.as avenues tor GkiUe4 ponOlmGl. were VGJ'y

Urnlte4 beeQ\iBe of tile dominance of smell. scale and self'-

elJ;>l.o7Qb1e 1nCiUetnee.

CominS to ,be unGD 1abouI' markets, wb1.eb we. more wider ana. 1D that sense nationa11n Cha~acter. Even tbeD

there was no bomogene1t.y smona 4ltterent seeton. D1stSnc-Uons basec1 on vaUous factors undeJ' d.U'rennt headlnas are made to c.1esl'1y <lhW a bol'cfeJ' lane bew&en tbam. t1nl.1l1e the localJ.sea 1aboul' markats. those tf.1tb.1n tbe same 1.ocal1t.,.

10 u~"can Bl-eas dU"tewli su_tcmt1all¥. 7herefoFe. ve'1ly

orten, dlStlnOt;l.oDS aIG Clravn lid. tb1n urbm 1abou~ markets

- 87 -

21 as 'oS'&an1seCl anti unOl'8anJ.S8cl sectors'i • formal and 1nformal as sectol's' etc.

~he orsanlsed ancl the UIlOl'gan1sed sectors are 41st11lgulsbed 29

ma1D1y on the beaU 01 three factoJ'sli (a) mal'lret st1"Ucture; (b) teClmolog;ano (c) relat1onsh1p v1til tha gove:rmment. Accor41ngl..1t ol'gan1Bed sector is eharacterise4 b7 fi.nns opera-

ting 1n oli.gopol1sUc prodUct muuts seJJJ.ag tbalr p~c:luCt9

me1nl.y ~ m14Q.e m"- uppel' !ncom groups ~reas unorgeni.sed

sector C)utdns Sliel.l a.."lfA CCJ%JPoUt.1ve f1ltnS se~ theU

B)OdB matnl7 to low 1neome g~ups. OI'San1s$d sector uses ..

.. 88 -

cap1tal. 1ntens1.ve and 1rQporte4 teobnology and WlOl"ganlsed

sector relt..es maSDl.,. on 1abou:r 1Iltens1ve SnUgenous tecJmo-1081'- Aga1Dt organlsed t'.1ms have access wend 1nO.u.ence over gove%"lamont macb1nell"¥ \fllerae.s UIloJ"ganj.sed sector does not.

;¥) Jm !)J'e1il~ Q)ns1~rB that the U!i'f.erences in ~des

of p1'O~oUon :sbcul.C1 tom the banta £01" dS.ut1nguS-uhing the

two sectors of the eoonOJD7. Jlnd monwver, he f'eeJ.s th'lt ~-na stGaf!2l.1.n0d 41stmet.1.on between th9se tl10 sectors

of urban e(!Ono.!!l7 1:& rntli.el' d1t'Cicult~ Such ~st1nQ~lone

mav ve:"y otten 1sne~ the l'9l.atiOJ1S bQwBen the sub-sectors

an4 sozmt1mes between the sab-seeton and t!:le tirma in the orgenised seetoJ'. He 1'oVOU);'s a sepento4 Datun of tbe entire martet rathe~ than the 4!cbotom.1.se4 syate.tu.

Oth@l""S who 61cbotom1se urban ecct101r4Y ate fc.~ ane.

lni'oDle1t applies ~rteJ:ept 8~8 to d1st1nSU1Sb between 31

tbem. John Weeks oons1c'1e&'S tb9 olllani.sat1onal. Chal"acteris-

t,s.cs ot exChtu'l.49 l'e1at1ol'l.sh1ps ao tbe baSJ.s :for his an~1ca1

cD.aes1tl.caUoJ,s. Infomsl sector 18 cha&"Bcteri.sed by

economic 1Dsecurlt)' .cause of its Um1ted access to the

sttream 01' resources. The etate S1ws aU proteC~D and

encouragem9nt to .rOl'!1a61 sectol'e The seCUl'1ty pl'ov1s1on b7 the state to tOI'lllal. sector can be refl.ecta<l 111 Uceno1.ng po.Uc1eS t dlscl'im1nQto~¥ c19cl1t facU.iUes and 1nterest rates, t_ a&aoUon, t'aoUo.t.Ues £01' ~rt1ng t'Ol'eSgn

J •

30. Jan BJ'eIllM, 1976t QS .ss.tt. , 31. Jobn week, '9'5. Qae52'-\., pp. 2-3_

- 89 -

tecbnoloay etc. l'bls govell'lmGntal be1p makes it poss1b1e

tor the tomal sectoa- to ma1ntalD eapS.ta1 1Jltens1ve and so.,. tSmes ewn 1iDpOI'ted teClmolo8¥. 2be wage may also be apt at blBb rates. The 1nfol'lD81 sectol' 1s depl'1ve(\ of these

facUlties an4 tlleRti'oJ'e teCbnoloSF 18 irl61genous and vages

are 1ow. 32

Mazumdal' empbaaj.S8s on the iDstltuUona1lsed baau of pftJtectlon of emploJUlent as the d1stJ.nplsbing character of foftl81 seato". 'Em})101Ji8ot in tale tollllal seetol' 18 1n some

3l sense or sense. pft)tecte4' • fb1s pll>t.ect1on may arise cut of tbe 1nsUtutlona1 pl'act.1ces 01 eltber VS4e Uftions OJ'

3)vemmenta or both acUng toaether. Since the waps an P1'Otectedt employer ill the :b1'm81 sectol' eveD dudna periods

of aces. sUJ>I>1¥ of labou may DOt be ahle to a1ter 1'_ Mol'8Over en" penon 1;0 tb18 sector ean on1¥ be .q>1o,.4

oD17 atter t &01na tbhUib 8 PIC __ o~ selection inVo1viba

aptitude tests sa we11 a. I'a~·. LaCk of contl'actua1 wl.atlonSb1pa Sn emploJU1ent leads to hI8h tumovel' of laboUJ'

in tbe iDfol'lD81 sectol'. 3S

pepo1a tol' em,p1J1.ca1 iDve8uaa~SoJUS uses .~oJmellt as the CI"1tel'1on tor cenntas 8114 dlsuasUie.blJla ttle 1Df'ol'mal

I r

- 90 ..

£a)m the tomal seotor. In other vordS. be uses a1ze of

pm4uct1oD unl ts as the opel'st1ona1l.7 convenient c1"1tel'1on

for 41st1rlSQ1eblD8 these two sectors. "We tllel'etore postulated a general propoSition that aU. produCtioD units emplo71Ds less then ten workers, lncl.\1d1na estabUsbmants and independent

36 vol'keZ'S mal' be con.denCi to constitute the informal sector'.

ibe obv.leus "aot tbat emerees i"ftta the above Us-Qtsslons SO that aU of them concede to tbO UChotom1.seCl View

of the utban econom.y. Whatever be the lloasne1atun one favours most to ldeDtlf¥ these sectors, in its 1ntel'nal

eonstJ.tuents or tte V8I'1able8 used to defiDe them. an appre ... ciable em.ount of sSmSlaI'ltl 1s alal'iDal¥ e1eeJ'. The 10-

8ta1411t.7 of emplo,}'JJlent-, economic uncertaint,. of _chanse le1atioDs, low level of wages, 1nttnalw use of in4igenOlls

tecbnoloSV, xelat1w1y 1esSi ac:cesss,b1lit,y • the stnam of msources eQec.t.a11,. thh>lISb go".mmant cbannels aft IDO" or less common SA an olassU1catSons to 14ent.Sf; ~ 1Dfol'laal .f~Jn tile .fOl1Dal sector. G1.ven tbis element. j of aimSle~t7 in argumen tSt we wJlJ. flOW tJ7 to see how tbls <llebotomlse4

vsew o£ urban ecollOllW con be correl.ated W.1 th the concept o~ sesmentat1cm o~ ).allow mar. ts.

- 91 -

The diebotomised View of uJ'ban labcUl' markets in IndSa

and tm l.aboW mOJ'ket seguJ&lltatjon tlJeoJ:;V wbich ve have

OlsQlssecl earlier can be correl.ateci at least at two levels. j1n~, 1n tbe conteat o~ SDlliUma1 - KoJ'm81 tUst1nctlon or

urban l.aboUJ' markets end secon41¥, 111 the context or the

posdble cU.sUnctS.ons that oan be c3J?QWIl Within the urban formal sector.

Formal seotor is Chsracte aGed b7 1arge scale produc-

tion, cap.1tal intensJ.ve teCbnolov aDci blgb wage I'ates whenas Ulformal soctor 1s conaU wte4 oj' small. scal.e produoUon, indlaenous tecbJJology and low wage rates. It ve take employ-ment as one of the ~wl"1& 1'01' 418~8 tbese two seotors. then tile two sectors cum be lOON c1eaF.1¥ ldent1t~4. 1D 1oJ'mal sector 0lqpl.01ZOOPt is protected; it eboV8 stable eznplo,ment conas.u.ons anCl hiab "0&8 ~ate8. l1l tbe informal. sector w8ges aJ'e low, emploameDt 18 not Pll)tecte4 and then-!O~ there is a1waye ttJ8 pos81biUt~ o~ e ooftOJJliO iDseC'UJ'lty

and blp tuIl'JOver. flfeCbnoloSl' of the orpn1sed sector f1J'ra

requ1J'e~ l\>ut.in1sed rmd tol'JZla1ised work conca~1o»s. wbU.e tbe 31

wol'k situation ill tbe unorgan.lseCl sector 18 quite iDformal". It 1s Dot cn1y iD1'ormal. but a1so dependS to a gl9at extent on the U_s enel CU811118s o~ the emplo18l's. "liol'mal. sector .& F qp Ib

- 92 -

YOJken have a protecte4 l.aboul- mal'ket "bUG those 11'1 the

1n1'oJ'mal secto .. aft _posed to uncenaSDty and tfb1ms o£ the 38

eraplo,e ran. How, U we compare the cbaracteJ"1sUos of emp101Jll8ot

in \he pJ'imal'7 end seoon4U7 l.abo\lJ' maJ'kets as sp1aS.ned b,

the sesman_tlon theol"ists, tb8 relat1ons.b1p between them becomes c1eal'er. "fhe p.rJ.acs.pal behaVioural. ciUtelt3nces

between p.1i.maJ7 30bs (and ~l'keI'S) end S9COJl~ 30bs (and

workers) .is taken to be atabU1t¥1 emplo,eI'S 1ft the pl1.mal'Y market .pect, l"Gv8l'd enel thel9toJ'e ellClt stabU1t,. in York behavtour. l'1b11e those 10 t. seeondal7 market do not expect.

39 many even dlscourage and tbereton taU tiD el1c:Lt 8tab1Uty". piom makes the 4istinoUon Ut~ more sba$7 • rfthe tOI'1IleJ"

ortel'S ~bs With lelatlvaly b1sb "sps, gooel vo1td.n8 conas.. Uons ••• enel above all emp1o,.nt st&bUity. Jobs in the

secondary seatoI' bl' oont.a-as' tend to be 10v payins. wlth POOJ.'eJ' vorld.ng condltj.ons •••• en4 to be ebaJ"acteJ'lseC1 b7

considerable Snsta::A1St7 in lob. an4 a )d.gh tumover emons the 1aboUl' tone".

~he claaslt.lcaUoua of tbe se_ntaUon theorists and iniozma1 sector theon.sts agree a1so on the question of

••

.. 93 -

banJ.eJ"e to entJ'¥ fil)m cne sector to the other. Papo1a obSones tbat "workers from the unorpn1sec1 sector tind it cU.ft;1cu1t to Cl'QSS the ban'l.el'S or entry to the organised

»'1 sectorn. Sepentatlon tbeor1sts could-dar that "the larger,

more Capl~a111ltenst- fums were aenerall..y shal.te~\i b;

ban"1e~s to entl7rt • Again InQia' 8 exPf)~nee shows tbat "tuob1l.it3 between secto%'S. even 112 tLj s~ occupat1on, 18 l'ound to be wsao1t1cantl7 lowtt •

~bo above pa8Sa&GS sboll that the colTel.aUon or

81m11ari.t¥ one can CiJ'aW 'between the c1assU!eat1ons or pJ1.ma17 en4 seeonda17 sepenu an4 formal 1Ilforma1 sactors of the

UJ'ben labour markets 1n In4\a, is qui to blah. In fact~ ~r

ana1l't1cal pul'p)se&J these class !.neat-ions can be considered

to be vel)' Close and can be thated sUke. Howawr. this

BbCul.c1 not be seen as an e%"au-ot elt!Is~ to debunk tile dUferenees

ill 1;.be 1evel.s of 4evel.cpment between C1eWlcpe4 and l.ess

devel.ol'84 eCXlnom!es or to beUtt1.e the pbilosopby beb1nd the

1abour ma:s-ke1j seSIDsntat.lon theol}1.

Nov comlllg to tbe urban formal.. sector al.one, this analo8¥ oan be va11d. ~he urban tol'm8l sector and the 1abour

• Papo1s., p.4ts., pp. s-6. !i.C. Bcbfards etc. (eda.) Q2roJ.~.t Xn~4uct.1on, p-xv. ~.s. PaJlO.la, "lnWstr1.aU.s8Uon,_ reClmoloSical. cbo~ces and uRan 1abour mullets" in A.K. BagChi. and NlI'male Baner"so (eo.a.) erma-Fm~{fl~IIA.ID" lnclUlUlMib ~el.b1. Unvel's1~y MSS, lJeJ.· 1, p. ..

maruts WltblD 1t cannot be ent.lre1J' classj.Ued as prtm8l'y

sector. %be urban tollJl81 sector also conta1.ns two tnee of l.abour mU'keta based on the c~tel'~on or stab1l.ity o~ emp1oy. ment. tile follD.a1 sectol" also has £lIl lntoJ'mal labour mSI'Dt

wbeze _ .. !mm 81'S b1I'eCl .iatoma11y, \Itt work on .1rhsv:Lar

basis and. tumoWI' is blab. Mammae%" abmFs that the!9 is

sizeable number of casual workers ewn III the large tScalB

t11lnS. ibis in other WOlVS, _ens tbat ewn tile fOJ'ma1

sector 1s Cbaractense4 1>7 the e1muJ.teneoua existence of casual woners wbose emploJll'a9Dt cgnd1tions are 11T8gu1ar and 1"8gu1ar emp1.oyees V_SCI) emp1cgmeD~ stobU.lty 1.8 ensured.

there foxe, the fObal a,ector itself can be divlclecl 1ftto two -pn&ar; and second.ar7 sesmeDte 01' ~be same market.

Beibre _tending the anologJes too long, a point or caution 1s m orl:9&-. iheh 8re many f1Jt.ns in the informal sector ¥bleb ale lSnke4 to £ozrmal secton. Labou&- nov hom suCh sectors cannot be 1'\Il.~4 out thoUSb tot fol'mS on1)? a small

proporUon. Papola awtes tbat, "there u-e units 10 the

formal sector which O~ V8l"ttcaUy l1Jlk94 nth the units 1n

the 1uge seal.e sector. Nost of these UDlta ~ engage4 :lrl

tbe proCb.tct1on of accessories, intermediate product-a spaNs I

an4 parts use(i by the large-scale sector 111 tbe manutactur1ng it, of Cnal. proc!ucts". :J:b1s lias put to stot1 that the seem1Dg1y n F •••

~ 14pak Mamm<iar, 1913, oP.d.t.. t Thougi\ b!.s endenee 18 based on Bomba¥ lext..U.e2Oiic1u5U"¥ al.ono. it scaems that same 18 tho case WJ.th otbe&- 1.nc1Ust.rj.es.

l+S. :r.s. Papo1a,1n A.K. BagcM. 8> tlSZmala DanerJee (ea.) Q;"AA't,a, p. 2S;.

•

- 9S -

clearcu.t &.sUDctl.on betwem fOJmal anel iDtoDm\l. sector may

8Omets.mes 'te mlslead1ng.

tiov we can extena the analog one step abead. The

pl'11!1ar7 sesrnm' 10 the fonoal sector may be ~theUcall¥ 41videc1 1nto uppal" tier anel lovor tter as in tbe case of segJnen tatS-Oil theo1'iea. w ltb1n the PI'imaIl' sesment tbose i.n the adm1n1stJ'ation can be class1fied as bo1c11Dg 10ver

tier c10bs end those ill the management and b18b~ spec~a11sGd technical antJ. sd.enutic S80UOns can be olassUS.ed as b01d-

inS uppe .. \leI' ~obs. 11bia is oDl¥ a tentative SDtu1t1on

without anI' ecnmCl Gmp.trical tbundaUon.

DiuIl6 practices Wil4e affGl9nt ill both sesments of the fol1na1 sector. Since the seconc1aJ7 sesment 1s Chancter-1.se4 by blab pl'OlOl'tion of 1eas e&loate4 labour ana the

recl'\11 tlRent 18 carded ~ll8b contractors the concept ~

t4J'lnS pract.1.ces in the sense ill wbich we use 18 or u.ttle sl8Jd,f1cance to Ud.e sefJdnt. Hovevel" binns practiCes become ~rtant 111 tbe pl'11!1ar7 seament or the toJ'ma11abour mar1se t whether we see ,t 1n tel1DS 01 upper and lover tiers or not,. S1I1ce tbe personnel. emplol'84 1Jl tb1s sesnent belong to eiAloateCl catetpr1es, the si.8n1ft.oance 01 education in

~ practices beoo~ 1ncreas1D8l7 impol"tant. Our aae1ys1s wUJ. be confined ma1Dl.y to tills eepent of l.abour market •

Howeve&-. we 1411 arpe U. tile nest chapter, tba~ even U4s

... 96 ..

pJ1.ma1"¥ setpent c:onsi.sts of many t.1n¥ 1abcur mar1sets sepentecl 011 tbe basJ.s of educational and occuIJst1ona1 categones.

We have seen that the cl.assUlcaUon.: of the urban econoZQ' into £ol'mal anel irlformal nts into the Uvision of

1abouI' marie ts 1nto pHma17 end SGcondUy seamants. fhe

formal seotor again can be a.v1de4 loto two, depen41ng upon tbe stabUlty of emplo,ment conditions. It is also tntult1ve1y

conceivable to c1ass~ the pJ'~ sesrnent tlJ.tb1n the formal sector 1Dto upper t10r and lover tser jobs depenc11ns

on the extent of 1ntemal labc)\U' markets and autborit7 to tals8 dec;1olons. ~te blI'1.Il8 practices based on formal qualUs..

cations bacoma·~ 1m,pOrtant in Ul8 primar7 sepent of the fol'm31 1abouI" market. JlnCl 111 OUI> tul'tbeJ" ana1¥s1s in tbls study

bl' .labour merle t W8 CQDt1ne ourselves to tb1s seSl!lent oJl1y.

3.6 UM'ma lUQJ.\C;U fbe neNltment poUcw tolJ.owe4 by any eIQplc)l8l" deJ)8nds

OD the nature end stl\lotun of 1aboul'mal'1eta. lD comptuuve 1abour maJ'keU the automa~o ad3\lStment meChanism of tba

system throUSh a flee p1Q¥ 01' the l'o:rc:es o~ demand enG

supply used to 4etel'lD1lle U1e optSmw slze and cl'1teJ"lon tor

l'ecftd.t1D6 1abolU>. In sesrnented 1abour markets various other 1'actol'S OOD Snto o~aUolh VOl' Qampl.e. tbe al.stenee o£ B stable intemal 1abouI" market s,.stem may cons1derabl3

- 97 -

1.nnuence tile bU'Sn& standardS 1n tile _ tel"llal l.aboul'

mar1ets at the t1me of ~ob-se1ecUon fi"om the ports of

cmtJ'y. In the sGgmtSnte4 1aboltr markets rec1'U1tment poUcy

tOI" the tvo sepetlts VU7. the recruitmDt toJ' r:conda17 S8S1Jlents are mdD17 ClU"nec1 tbro\l8b cont.ractom_ the :Labour contr8otol'S aenerell.y make esnements with tbe f1mS regard-ing tel'lnS of p~nt and bnna lfO$e1'8 f'rom distant anas to suppl¥ to the coDeemeCi f111IUh Howe_r. 111 the primary

091J1lGnt of the f'ol'lDBl. sector, employers l.ook for various

traits of the.11' P1'OspecUva emplo,ees in the se1ectl.on Pln)C8SS. Our 41scusslona on td.I'1ns pJ"acUceo VJ.l1 be con-

I1I1e4 mostl7 to tb1.s 8epeD~ only_

~he mOl'Ultment pattei'll val'4e4 soog the ft.auJ, depenct. iDg on the 800ial ol'lSiP of the penons who OlfJ'lo4 and. manased

the ft.l1llS. fba people w1'lo plOnded. leac1ers1l1p for the 6eve1opment of lndUsU'in3. SWucture in 1J'l<Ua can be 8l'Oupe4

41 j.nto lou" ( a) the torel8D colonlal. eUtei (b) <Jo_sUo 4,JPmst1e eUte • the t'amU, CIlODceDlsf (0) the mu1tSnationals

and. t.be1.r SUbal41tU:1esi and (4) ;tubac entel'pr1aes 1ft tbe

pos t-InCo&pencteDc. ~. BaCh one 01" tbem toUowed 6 utterent JIlOUc, oZ recZUitment because tta management styl.e the7

•

- 98 -

cieveloJIG(l vere dlt'i'ehnt. rhe for&1sn eolon1al &TOups and

theJ.zo subs~cUan.es to110lf84 en etlmo-centnc OJ' raelal app1"Oach, the IncUan elJ.tes tcun<l talents genera1l.¥ fl'om tbe1r ovn famil¥ or conmlmJ.ty an4 the pub11c sectors genel'all.¥ followed a.a po1y.eentriC appZbaeh, 111 tbaa zec1'U1tmen t pol.1cJ.es.

1 t vas not~cec1 111 the vest that tbe sub-cu1tures or 8001&1 ongl..o of t.be emplolSGS bacl eons:1dsrable SQ7 111 the

~ 30b se1ecUou plOCQSS. »~r oxsmpl.e, P10re mn1nta1ns that .labour market se~tats.on 18 col'1e1ate4 tf1th the sub-cultuJ'es of the emp.loyees 1'OC1'U2.teCl to venous sGsmGnts of the mar1ret.

He cone1ates middle class sub-culture with .1obs in the upper tiel' of the Pl'1nl:U7 sector flOel lover Class sub-C\Iltuns Witb ~obs 1n the secondel)' ~ector. fhose ch.ss1t1caUons and

oonel.attons me; not be entlnl¥ Qp1icab1G to Indian labour market sJ.tuatlons. However, in IntUa also the sub-cultural .factors or soc1a1 0l'S.g4n of the prospective GlIlPlo1Oes are

1mponent detezmine.n's. nIt has teen tOund that to a lsp

extent, the women in two seetoN also eo_ hom dUC.Mnt. /,SO

soc1o-eccnomic stz"eam.8. l' 1.s i\athe%' po1nted out tbat

workers or tbG 1nfoJlnal sector ant msUy ~1'Om l"esouroe1ess classes who tid not get an o»~rtun1ty to GO .for e4ucat1on anel moB t or tbe ~rmrs in tb9 .fo1'mll1 sector be10q to

I I

lW· IUohae1. PS.o.re, AF .93.&, t liP_ 1~-41. ~.3. papol.a, 1n Bagcbl &. N1J.'ma1a Baner3ee (ods.) A2.t.9U.t" p. 2;6 ..

.. 99 -

re.1at1ve18 better eeonomlc status end who hael tbe opJ)Onun1ty

to 80 tor b1gber educat1on. However, tb9 se1ecUon procoss was not stnctly acoordJDg to tb1s cr1tor.lon. This is

faC111tated tbIl)\1gb CiUi'erent mechanisms. In the case of any socle~ Where educat.ional. opportunities are not equal.,

the pe.nons who got education WUl. be £rom tam11Sss wltb

better sod.o-eeonomic bacql'Ouuc. ADc1, tt.ore tore, us1Da

edltcaUonal. quel.1fi.cat.1ons ill the sel.ection pl'Ocess t

1n(l1rect.ll' eatlsfWs the emplo,e1' on th1G count al.sc. Ueizlg educat1ona.l oredenUa1s tor j.ob select1on,

helps the ~1'er to lmep the sssmentatS.on process 1n the ,1 1abouI" mas-leet mo1Ya conru.d and eoncreUSe4. 1'0 be reaU.st1c e~cat.1onal Cl'edsnUa1s weIG one of the divisive means used by thO emplo~r. tl As per10d p~81'9Sse4 emplo,ers tUZ"ned to

a ze1atl vol.y new &!v1S1ve means, the use of oducat1ona1 cm<lent1els. For the .f1rst time 9chu:mUonel. credentials ,2 W8n3 used. to l'OuUnlm akUJ. re~u1rements fol" :obslt

•

I.S pl'O<lUct1oo process became comp1ex enG more SOph1stj.e

cawd because of the 1ncraBS1.ng use of af!vanco(l tocbnol.o3ies

the deJllal'lds for genere1 skills or the vo~!'e vsre replaced b¥ that tor sp0c1~.1c skiUs. :lhe <level.opment and opp1i.catlons

of modem sc1entU1.c management aptn reduced the skUl.

;'. %b.1s aSJ}ect 1s dea1t. in c2eta3.1 .in chapter t'our. See sect10ns on channel.U.08 Aulct10n 01 EChlcat.1on an4 on mob1l.1t.y cbeSos.

sa. h.e. ECbiaJ'u etc:. (ods.) op.p1.t" Intl'cauction, p.xv.

.. 100 ..

'3 l'equirell8nts 01 the \erkel'S. In those .1obs which required

speC1Uc sk1Us. tbe direct appl.icaUon of the eJdJJe developed

tbroUSb £ormal s.mcoUna system became less ~t. Sttllt

their education VQS CQna1dered to be most. use.tu1 slll8le

criter10n .in t.be ~ob se~ectloD because or vaI'1ous reaSODtb

( a) even 1f the ~ob 1'9quire4 specU1c sldl.ls,t educatLon

was czons1dem4 to be useiUl to cRate an apt1tuCle tor adaptst;S.on. "Uckel' the adaphUcn the better tel" the

emp1o~r because 1t .duces bis tra~lns costs; ( b) one aspect of eCiUcaUoD QPpnc1ated by employers is

tba t the pneral sldl1s deve.1ope4 ~qb edllcaUonal. s,atem can be c1eCOJlp)se4 into epec1Uc stdllsi

( c) e4ucaUonal s18tiem develops behaVlo\lJ'al. Un ts eoncblC1ve

for ~ob performanceJ ( d) educational pertol'llllmee 1s conal<lem4 to be a _Hable indeX of 301> performancea end ( e) educaUon is one or the least _pensJ.ve meOhanlsma that can soften indlY1dU.a1e on tbe basis of ob111ty and

a~stab.1Ut¥.

~hel'etoret emp1o¥SI'S atarted rel.y more and more on educatJcnal quaUUcatSons to seleet tJlej.J' prospective emplo,-eGs.

5,,+ Generall.y Gmpl.o~I"S toUow three approaChes in l'9cnd.tment

F

S3. Benor B1'8VeJXll8ll, tn~U£ M4 _"~~ Soc1a1 Scientist. Pross, r~ :vondI'wD 9 t rB v an4 V. ;a.. cmCJJ. se1e~n, and, ra'ijW'AAMI i.n &du.cat,1on§ M4 imslAwmmt., c.., Par s ", t p. T.

.. 101 ...

pollel with zespect to educaUon. ( a) ibs bas~c 1'8'4 material appn>acb. In this approach

GmP1o,eJ's assume that lJl4ilv~dl.tal.s hafing a certalrl l.eve~ of' edUcation possess 0 eorreepond.S.n8 level. of sld.lJ.s. But considers that tbe8 nead. t'urthel' train1ns .for successt'Ul.

30b J)G r-tOI1JlellC9 •

( b) value ac1l'lecl app~6Cb uhere lntividuals are CODA4e1'e1i

to have 8cauizeCl sometbSDg 1ft addition to tbs1r ab111ty by

virtue of bis educats.o~. ( c) ene product epp1'OaCh wb1cb asaumos that individuals

possess imediate.1y applicable sk1l1s wi.tbout eIl¥ further 'U'aln1na.

In 9arUe.. ~"S em.pl.o,el"s toUowod end proe1Uct approach

generaU.7 fol' lover level .Jobs end value added 01' bas1c raw matel'lals ~pJ:Oacb for top level. Jobs. fhe eas-genes of

lntemal labour marks ts SnflUellce4 to have a Charlge in tbls praoUco because emplo19J's in theu hirins pJ'acUcas 100k not only the 1med1ate ~ob COlltent but aleo the ze1ated c10ba

to Wb1cb he may be promoted eventuall7. ~he general 001UJ~4eI'et1ons tor decj.d.1ng a b1Z'1.ng

pracUce am workers ablUty to per.fol'm the 30b task success-

tulJ.Y. bis C6JlabUlty to acquj.re new okUlo·. bia adap'ab1l.S.ty to new envi%Onment anel his atU-tude towsrCls bahanoura1 norms in tbe p1ant. Condcier1ng ell. these .factors employers

- 102 -

tlnalJ.se a .C1'Ultment poUo,y tor bis 1'illn. '£h1s does not mean tbat the once set pattern ot b1.I'1ng standards remain unchanaec1. ibis ws.u cb.anSe del0DcUns on the ~al1ty an4 quant1'701' ~p1.J o~ l.abour force avaUab1e 18 tbe 1abour

llUW1et.

ilepsil'\ii.bs upon dGmand-suppl.¥ conditions va c:an have

two sltuaUons - (1) concu.Uons of e&cess suPJll¥ (U) condi-tl.ons of shonages in sll.PP1¥.

JJ\l11.r!s pel'104s of excess sup~ 1n J.abouJ' markets

emploJ'On' barga1ft1ng POl-tel" increases, he &eta e better cholce horieon. file emplo~r t 1" he w1Bheot can recru! t persons W1 th h1&hel' leve1s of e(\lca~n. .I t 10 a eollimOn17

obselWd. pbenomenon tbat under sucb oonCi1t1ons eJlG>lc18J" ;S esca1etes tt.e m1D1!nwn qua11.ficaUon l'8quj.ftments o£ Jobs.

10 other wortls, wben appUCQIlts are too much and 30bs too 1esB, managers or the firm upgrade tbB ecmcatJ.onal l'equ1J'e-

mentG of the same ~b. ~he:re CaD be 4iSterences 01' opj.n1on

hSeJ'<U.ne the cause oS SUCh a dec1s1oDI som araue that it 1.S because of devaluation of C!JcmcaUon. Others argue ~hat i. t ~s because 01' suppl.y effects in the l.aboUl" market. But both ag%'ee that, the m1rWnum qualif1.catJ.ons spec1r1ed for ~obs &1'9 upgJ>a4ed.

SS. 1-.1. Bl.aUSt pliG LQyaJl'4 et.e., ~.i!1ses 91\ eiJlS\yatg~=n~-,~ &n +n~t All.en l.ane the Penauln Pless n D,

9 • h.s~nvastava and J.C.P. OXenham. ''Employers and scboo1s • A SOlllul.1ns survey among soma Eql1079rs 1n India tI , ~~ iafJlll91f§l.tlol1ma1. vo1. A~V t AprU-June, 1978. pp- 7-11. ,6. »or Cleta'le4 USCUSS1,QD on tbS.s aspect sGe. cbapteJ> V of thi.s (l1ssertat.1cm.

• 103 •

The reaction £ft>rn the pan or tbe 3Ob-seekeJ"s w111 be

Q)JlWl~UDntal7 to the attitude of t.be elQP1oyers. The <:CDtSAuous

folling of ezpectatt.ons .forces one to opt f~ lower papna 3obs. even 1£ he 1s b1gbl, edllcBte4. Comd.ttee on unemp10lJllent 1ft its suS'Wl ill Pun3ab eboVed tbat 2~ of the unemp10lGd gradUates enc1 l~ of the unemplo,e4 post.-gh4uates 1D Arts and 90~ of tbe unemplo)'8cl gadUates in Science were prepared

~7 ,8 to accept aJ'l¥ Job that was otfemc1. G.8. Ji1.e1cls notes that; 111 devel.opina econom1es bette .. e(bt~ate4 persons go for

10ver paid ~obS. 'lhese leaCUons ~l'Om both sides tinG1l7 leadS to a 1'159 111 the minimum qua11tlcat1ons demanded 1'01'

the same ~ob.

ihe oPl)081 te of t14s process operates duftrls periods of sbonages o~ suppl.,J of e (iUcate4 persons s.n the 1aboUr

market. ~he cbo2.ce options of the emploaers dec.aso, and s1lm11taneoue17 the bargEdnSOS J)Ower of ~ob-soemrs 1ncreases. The employer may lover tbe blJ'1na stan4al'dS. fhts ma~ be

accoJll)an1ecl by an increase 1D 1np1ent training progemmes. %.be US ecououw in ml4-sSaUes expenence4 sucb a I'Oduc~j.cn

S9 10 educaUona1 nq\llRmente.

I E

56.

- 10&' -

We have d1sC\lSse4 two situS.ODS under wb1cb tbe

~ practices Cbanae. But it does not mean a1wap that a chEmp in hS.~.1ng pract1ce is tbe resultant of excess or Bbortaps of supply concU.t1ons in labour mtlrket. E.ven du.I'1ng per1oc.ts 01" nomal cwnd1t;lons (l'el.at.1ve Q~uaJ.1ty

between OOman«l an4 wpp1y) there elm be changes in h1rJ..nd

pX'aet1cGa because of ver:lous factors. ( a) 1£ overall. eciucstion81 l.evel or tbe 1aboUr fo&-ee

in en economy goes up, tan l:11I'iDs stanc1ards al.so may

show an upward tJVnci. ( b) the enetence of internal. labour markets mB7 keep the

biring stanc1arGa llptaJ'dS because tbe emp101Or m&7 take into

accoUDt the possible poslt1ons to wblch b1s pn.lSpect1ve emplo,ees may be pll)mte4 !a tuture. ( 0) MeisS' conc1i tions of ChaDg1ng teebnology emp1070l"' Jnrq

inCle8Se tile b1rlng stan4uds to l-educo biB tJ'a1n1Dg costs. ( CU dLll'1ns penoCls of devaluaUoD or education GJlQ}1.o;ver

can ~tU'iabl7 ra1Se tbe !d.1'1n8 standards.

Apart hom o(Q1cational que1!J'J.caUons there 819 a1so

otbel' faotors tibet lDtluence blnng pracuces in IntU.a. In many 1abour marketst 8apeci.aJ.l, 1oca11abour marlmu, caste, eomtllUfttt,J' factol's enCl pel'sona1 contacts fU'e also 1mportant detebl1nants or ~ob se1ecUon. In 8 ti.eU report 01:1 1abour mal'l1ete for era6uates Homes and :J:nve4i DOte ~bat Qabout

- 10S -

8O?t of the srada1ates Who aJ'e emp1018c1

t.tm)\1Sb the'-" intl.uence. fhe remalniD. emploJed in their f"emi1; blB1ness OS- tl

nCJ'U.1tmen' s.s oJ'gen1se4 on a I'eSlonal But wbGn thO mal'l!et beCOmDS IlDre national, these factors get reduced anCl tbe AnnuGmCG of e~oatlon 10 seleotion PI"OCOSS

lDcxea8es.

In tb1S ch~teJl' we d1ecusse4 tbO nature end structure of laboUl" marlS8ts in general. and of India 1n part1.cu1ar. It was noted ,bat. the 4evelopments in tbe leboUJ' mawl!et an

close17 ~DJreC1 to the davel.opments Sa tbe p~o4ucti.oD secton of the econoJQJ. In tb.e w8stem countl'1es. the emergence and domSnence of col'pOl'ate sectors Witnessed sesnGntat10n 111

1aboul'mea-lrate. In the case of In4S.a also the growth of.' 1aboul" mas-Jrets wale 111 hal'mo~ nth the development of the

iDchlstl'1a1 stI'UCtUI"4h LllsS OUl' 1ndustr1a1 St.lUctul'e. Indian

Labour mal'~ts vele never compe~uve. fhe,. were a1w8.J'S sepente4 111 one rODD 01' the other. It ves tounei that many

60. Ennow Homes an<1lilvedlta ~nve~ a~he ~al'kst tor Ora6uatea: A Hel.c1 ae~l'tnt i'fgDomt.,S ~pl.1.t;lgi1 lee~t vo1. 6. No. 50. Dec. 91~t Jh •

ee so the same authoZ'S, ftP'uncuoD1ng of the Labour Marlse t 1'01' Lcce1 Graduates" 1n 6. 1IevClas P1ll.a1 and C. Baks (04.> W'Dft~08nd WnIQ, Popular PrakasbaDt BOlll~ 1m, pp. .. • P apo1.8 &; Suwaman2.am Sbolf~; the preClomUlance 01' use or 1n1ormal. ctumnels to secun ~ob 1ntormat,.~ons. 1:.6. Papo1a and K.lt. aubraman1am, RR.4t. t '91', p.113.

- 106 -

of the labour mal"ke t claasU1.cat1ons ~ vogue BI9 appllcab1e.

td tb mocU.f1catlons. in the Inc11an conteill t also. In the latter pan of tbls Chapter va discussed about

the Ml'1ng pract1ees. It was seep tbat the soc:lo-ecollOIUc

status of tbe 1nd1v1dua1s ecmS.ns for c10bs in two secton of

the mal'kst. - 10l1nal and 1.ntol'Jll81 sectors, vary. Gene I'all¥ , fOl1Jlal urban labour marks t eSJ)eC1aUy pr1mary 89srneD t absorbs

laboua- from be tter so~o-ecoflOJD1.c baekgl'Olmds. Us1.ng of

edLacat10p sometimes 1.ndlrect11' halES the emp10191' to fac1l1tate tbla selection llroceso mo~ easU¥. Later us saw that tile

supply-demand condi tiona in labour mara t ruey cbange Us b1.r.lng

standards, though all. Chanps Ln bln.nS standarcis cannot be

attl~wte4 to 1t. Genera1l.y excess suppl.y causes a nse 111

h11'1n6 standarciS and excess c1emand l'eSlUts in a reducU.on 1n

blr1DS staDciarcls. However, 1n 10081 labour mal'mts othel'

tactors like easte an4 personal Q)ptacts also haw lnnueoCie 1n tbe seleotion process.

Now va have seen the l'8l.atS.on between nature and stJ'Uctul9 of labour merle ts and blJ'11l8 poUcles folloved. It

vas found tilet education j.s lncl9881na17 useu for 30b selac-~Il. Thel9fore" t bec:omB8 essenUa1 to n.nc1 cut What an

the iUnCtAoDS of educat.1cn to tacU.l.tate the l.abour markst tUncUoD1ns under venous QDncU.~ns. In the fol.l.oV1ll8 cbapten our attempt v1lJ. be to enal.¥se the %Ole of' education 1n an eCOI101D7 uncier concU.t1.ons of Cbang1ng econcmi.c 9~tuaUons.