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

Human Capital

Conference Paper · January 2011

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 2011 International Conference on Economics and Finance Research
IPEDR vol.4 (2011) © (2011) IACSIT Press, Singapore

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

Human Capital

Dr. Geetika Dr Tripti Singh

Professor and Head Assistant Professor
[email protected] [email protected]

Anvita Gupta
Research Scholar
[email protected]
School of Management Studies
Motilal Nehru National Institute of Technology Allahabad, India

Abstract— The phenomenon of economic development is a (i.e. small and/or unregistered) and wage employment in
composite of several factors, which may not necessarily have informal jobs (i.e., without secure contracts, worker benefits,
economic connotations; The contribution of human resource to or social protection)[5].
economic growth of any country cannot be overemphasized, The concept of informal sector was first introduced by
especially in a country like India which is still reeling under the Hart [2], with the distinction between wage and self-
pressures of its mammoth population and limited capital employment as the essential difference between the formal
resource. The Indian economy can well be studied in two and informal sectors. Later ILO broadened the scope of the
distinct sectors, organized and unorganized (informal). The informal sector. Informal activities are typically
widespread informal sector in the country is a major
characterized by ease of entry, reliance on indigenous
contributor to its development but at the same time it is
plagued by several problems such as no proper service rules,
resources, family ownership of enterprises, small scale of
no wage rules and no possibilities of career advancement. operations of labour intensive and adaptive technology, skills
Another notable fact is that as many as 94% of total women acquired outside formal schooling system, and unregulated
workers work in the informal sector in India but they have to and competitive markets.
face gender discrimination which is almost inexistent in formal The Resolution concerning Statistics of Employment in
sector. Besides, their contribution in terms of income the Informal Sector, adopted by the Fifteenth International
generation turns out to be less than their male counterparts, Conference of Labour Statisticians in 1993, defined the
which means almost half of the population contributes to less informal sector as follows: The informal sector is regarded as
than half to the national income. The present paper aims at a group of household enterprises or unincorporated
understanding this lopsided utilization of human capital and its enterprises owned by households that includes:
fall outs. A small survey has been also conducted in the State of • Informal own-account enterprises, which may
Uttar Pradesh to find the realities. However it may appear employ contributing family workers and employees
presumptuous on part of the author to claim its generalization on an occasional basis; and
for the country but a number of similar studies conducted in • Enterprises of informal employers, which employ
other parts of the country by other scholars support the
one or more employees on a continuous basis.
contention.
As is clear from the literature the informal sector is a
Keywords-Informal sector, women workers, gender multi-situation syndrome. It is characterized by non-
discrimination 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,
I. INTRODUCTION illiterate to semi-educated, in all age groups (including below
Employment in informal sector comprises one half to and above the normal working age bracket). This
three-quarters of non-agricultural employment in developing combination of differentiated and distinct characters is more
countries: specifically, 48 percent of non-agricultural pronounced when we talk of informal sector in the urban
employment in North Africa; 51 per cent in Latin America; areas; of a country like India. Given the disadvantaged
65 per cent in Asia; and 72 per cent in sub-Saharan Africa. If position of women in the labor market in most parts of the
South Africa is excluded, the share of informal employment developing world, the result of long-standing societal norms
in non-agricultural employment rises to 78 per cent in sub- which discourage the social and economic integration and
Saharan Africa. If data were available for additional advancement of women, the majority of female workers are
countries in Southern Asia, the regional average for Asia engaged in the informal sector. This is especially true for
would likely be much higher. Informal employment is sub-Saharan Africa and South Asia [10]. It is also evident
comprised of both self-employment in informal enterprises that female workers rely more on the informal sector than

534
men -- the shares of female non-agricultural employment in women work force is engaged in the informal sector in India
the informal sector are generally (and often substantially) (National Perspective Plan for Women, 2000).
higher than those for male workers. But women's Informal wage employment is comprised of employees of
participation in terms of their share of informal sector informal enterprises as well as various types of informal
employment is more mixed. Recent evidence shows wage workers who work for formal enterprises, households,
extremely low shares in North Africa (for example, Tunisia: or who have no fixed employer. These include casual day
18.1 percent) and South Asia (for example, India: 22.7 laborers, domestic workers, industrial outworkers (notably
percent). An estimate by the World Bank shows that 90% of home workers), undeclared workers, and part-time or
the women working in the informal sector are not included in temporary workers without secure contracts, workers
the official statistics and their work is undocumented and benefits, or social protection. Home-based workers and street
considered as disguised wage work, unskilled, low paying vendors are two of the largest sub-groups of the informal
and do not provide benefits to the workers. workforce: with home-based workers the more numerous but
In India, almost 94% of total women workers are street vendors the more visible of the two. Taken together
engaged in informal sector, of which about 20% work in the they represent an estimated 10-25 per cent of the
urban centres. Majority of women workers in informal sector nonagricultural workforce in developing countries and over 5
come from those sections of the society which need income per cent of the total workforce in developed countries (World
at any cost. Nearly 50 per cent of these women workers are Bank, 2000).
sole supporters of their families. Another startling fact is that On basis of previous researches and other reports,
out of all women workers a mere 7.5% are availing the following categories of women workers in the informal
membership of authentic registered trade unions. Yet another sector have been identified:
fact to cause concern is that women have to work, unpaid,
1. Construction labour: women labour have to work
even outside home, for some 5-8 hours to help their other
family members. This fact has to be considered alongside the always as unskilled labour carrying construction
fact that an average woman has to work at home for some 7- material on their heads to the construction site,
8 hours doing household chores including upbringing the while the skilled/ semi-skilled work is done by men.
children. Most of the women workers lack proper training. 2. Domestic workers: this category of employment
They have very few options to avail as far as gainful jobs are goes mainly to women, especially young girls. In
concerned. The quiet contributors to the effortless movement 1997-98, there were some 1.68 million female
of the social carriage, the women workers engaged in domestic workers, while the number of male
informal sector are poor, perhaps poorest amongst poor, workers was only 0.62 million. The household
uneducated and weak. workers include part-time and full- time workers.
Various studies by Papola (1982, 92)[8], clearly and
emphatically show another amazing fact that, the urban 3. Garment workers: these women work with some
labour market discriminates against women much more than big drapers, boutiques and stores; here too same
the rural labour market. This discrimination results in decline bias is evident that the women work as helpers to
in the participation of women in economic activities. male tailors (called as masters). These workers
include those involved in knitting woolens.
II. CATEGORIES OF WORKERS
4. Vendor: this is the most scattered category, which
The biggest problem with the informal sector in India is
that there is no precise information about the total number of includes women engaged in selling different types
workers what to say of women engaged in this sector and of commodities, like broomsticks, cane baskets,
also their respective ratios in various diversified occupations. utensils, petty cosmetics, bangles, vegetables and
The Report of the National Commission on for Enterprises in those running roadside tea stalls, etc. Nearly 40%
the Unorganised Sector highlights the existence and of total vendors are women and 30% of these
qualification of unorganized or informal workers, defined as women are the sole earning members in their
those who do not have employed security, work security and families.
social security. This universe of informal workers now 5. Sales girls: these workers are further divided in
constitutes 92 percent of the total workforce. two categories, one, those moving from door to and
Whatever data is available is from Census 2001 Report
place to place, other, those working in shops
and from National Perspective Plan for Women, 2000.
(mostly women related items like jewelry,
Although there is no precise and authentic information about
the total number of woman workers engaged in informal garments and cosmetics etc).
sector, still an estimate is drawn on the basis of available III. THE SURVEY
information. As per census reports of 2001 regarding
workers and their distribution there are some 60 thousand In order to get a deep understanding of the phenomenon a
women workers under the categories of main workers, field survey was conducted over a period of six months in
marginal workers and those engaged in household industries. the selected cities of Uttar Pradesh, which is the largest State
According to another estimate, almost 90 percent of total 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 A total of 240 workers were surveyed, including 65
structured questionnaire. These workers were interviewed to domestic workers, 50 construction workers, 42 sales girls, 40
understand following aspects of their occupation: petty traders including vegetable vendors, and 43 garment
• Reasons for taking up a particular profession workers. Since the sample was theoretical sample and could
• Terms and conditions of job, such as job security, not be used for the purpose of statistical analysis, besides the
leave, other benefits information was collected on basis of unstructured
• Wages, whether daily/weekly/monthly; certain or interviews therefore qualitative analysis has been adopted to
variable reach conclusions.
• Discrimination on basis of gender
IV. FINDINGS
• Personal information, like age, marital status,
education, family income The survey tool was personally administered by the
For collection of information semi-structured interview investigators. The guided interviews results are summarised
method was adopted. These workers were contacted at their below. Women seek jobs in informal sector because it is easy
work place such as construction sites and major labour to enter this sector. There are little or almost insignificant
centers of the city to get a feel of the conditions of women barriers of skill, training and other formalities in the informal
workers engaged in construction work. To survey the Sector. This sector provides an easy source of income to the
conditions of household workers, the group habitats of these unskilled and uninitiated women folk of our country. The
workers situated in various parts of the city were visited. In women workers continue to work in the same unit or same
these habitats we also came across some petty traders as category of work for the lack of knowledge of a better
some of these poor women have been found to prefer to sell alternative or most often lack of enough initiative to move
vegetables or run petty shops of miscellaneous goods near from their familiar atmosphere to absolutely new field. All of
their residence instead of working in the households. The these women are doing this job to supplement their family
women traders sitting at the roadside and selling variety of income barring a very small percentage who manages their
goods were also interviewed. It was not an easy task to livelihood from this work. The results of the survey are
contact the garment workers and sales girls, as they normally summarized in Table 1 to give a bird’s eye view of the
do not gather at their work places. We could reach them only situation of women workers in the informal sector in the
with the cooperation of middlemen who provided them work. 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 Reasons for a particular Terms and conditions of job Wages Discrimination on basis of
Category profession gender

Domestic Workers • Only job available near • No defined rules; • Negotiable • No discrimination
their residence • Increment in wages/ fringe • Wages not enough to • More preferred against men for
• Economic compulsion benefits only when working for satisfy bare minimum household jobs
• No other skill long period needs
Construction • No land • depend upon local contractors • no regularity or security • disparity in wages and in nature
Workers • No other skills for work of job of work
• No other options • Ill-treatment and harassment at
the hands of contractors.
Garment Workers • low middle class who want • No significant information • Work based, • No incidence reported
white collar jobs (commission)
• Can work from home • Negotiable /Arbitrary
Petty Traders • Find pride in being self- • Self-employed • Uncertain • No incidence reported
/Vendors employed
Sales Persons • Economic compulsion • very tedious and also involves • Mostly work based, • No incidence reported
• More dignified risks of personal assaults. (commission)
• Arbitrary and low
wages are not enough to satisfy their bare minimum
V. ANALYSIS AND DISCCUSION needs but they continue to work since they could not
Following is a detailed analysis on the findings of the bargain for more. In most of the cases wages are
survey which includes observations of the researchers while negotiable.
conducting the survey: • Another interesting fact which emerged was
formation of collusive arrangements among workers
A. Domestic Workers since in the survey wages differed on basis of
• The domestic workers are engaged in particular locations.
profession, since it is the only job that they could • Wage discrimination on basis of gender could not be
find near their habitat. All the workers feel that the ascertained in this category. Instead a fact that

536
 emerged and that was in support of World Bank D. Garment Workers
findings was that women were more preferred to • In the case of garment workers, those working on
work as domestic help as against males. their own were in better position as they did not have
• Increment in wages and other benefits are given only to be commanded by someone else. But majority of
when the person is working for fairly long period. In these workers were working as helpers to a big
some cases some workers are found to be working draper. They receive payment on piece basis and this
for more than 10 years but mostly the period ranged payment is so paltry an amount that one cannot ever
from 1-3 year. dream of depending a living on it, although they
• Another significant dimension that emerged was have to work for five - six hours per day. The best
significant amount of non monetary benefits like return after one day’s work can be Rs. 70-100.
food, clothes, gifts and tips on special occasions and • These workers mainly come from low middle class
by guests. who need to support their family income but do not
B. Construction Workers want to be bound by workers’ category.
• They want to work from home in their free time and
• The construction workers normally are migrants receive a more dignified treatment. In fact these
coming from nearby villages. They depend upon workers could be contacted only with the help of the
local contractors for work as well as wages.
big tailors, boutiques and readymade garment
• There is disparity in wages; men are paid more than showrooms.
women.
• There is no regularity or security of job. E. Petty Traders
• Almost all of them complained of ill-treatment and • These included those women who are able to
harassment at the hands of contractors. There was an manage their own profession, whether as vegetable
indirect hint to sexual harassment in terms of vendors, basket weavers, broomsticks makers, or as
language and gestures. owners of road-side food joints.
• Some of the contractors were asked about this • They are in better condition than their counterparts
complaint and the single most important reason cited in other professions due to self employment nature
was difference in physical strength; that female of their profession.
workers do less work than males during the same • They can work on their own terms without fear of
duration. exploitation by employer or middlemen. The
C. Vendors/ Sales Persons monthly earning in this case was found to be
reasonable as compared to other job categories.
• The survey women included the sales girls at various • There was a special sense of pride among these
showrooms and shops as also those engaged for workers which was completely lacking in all other
direct sales. The job of sales girls moving from door categories. They even indicated that they would
to door is very tedious and also involves risks of never work for others for whatever reason.
personal assaults. They prefer to visit the targets
during day time when they can be sure of their safety. VI. CONCLUSIONS
• The mode of payment in this profession is mainly
The women workers do not have a choice to work, or not
work based, which they call commission. This
to work, due to dire need of income. The limited
commission is unbelievably low and arbitrary. These
opportunities available to women are mostly low paid, low-
workers have to contact a certain minimum number
status jobs in the informal sector; jobs which do not have any
of persons per day to secure that commission. The
possibilities of betterment, advancement of efficiency or
commission varies from product to product. There
training, to enable them to enter better jobs at a later stage. In
are no uniform norms of commission rates; it is
the overall state of unemployment and lack of opportunities,
unusually in absolute terms and not in proportion of
women hold a secondary place to men in the race of
sales. This commission could be range from a
employment.
meager Re. 1 per person contacted to 5% of total
It has been observed that women find it difficult to enter
sales.
the structured system of organized sector. It is also found,
• Those working on shops earn on monthly basis with that there is no economic reason for paying lower wages or
better emoluments and greater job security. giving only a particular type of work to women workers.
• All of these workers were educated till secondary or When they work for themselves, their wages and work is
higher. quite comparable with those of male workers (For example
• All of these women reported the need to earn to in case of vendors).
support family needs such children’s’ education and There is discrimination in wages, nature of work,
daughters’ marriage. 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 these women workers we are ignoring important contributors
and least privileged. There is diversity in the nature of work. to national income of the country.
Some of them are construction workers, some are domestic
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