Significance of labour statistics

Source-This post on Significance of labour statistics has been created based in the article “The need for the use of labour statistics” published in “The Hindu” on 30 April 2024.

UPSC Syllabus-GS Paper-3– Effects of Liberalization on the Economy, Changes in Industrial Policy and their Effects on Industrial Growth.

Context-The article highlights the significance of having robust labour statistics to refute the arguments of employers about labour strikes, retrenchment and closures. Significance of Labour Statistics

What are the challenges in obtaining labor statistics? 

1) Labor statistics are not as rigorous as economic and industrial data. While surveys like the Annual Survey of Industries (ASI) and the National Sample Survey Office give detailed information, they often miss important details about the labor market. The data from the Labour Bureau mainly covers administrative matters and doesn’t go into detail.

2) The data on work stoppages is collected voluntarily. There is also a lack of comprehensive data on labor inspections and retrenchment/closure applications at the national level.

Impact– This lack of quality data undermines the ability to have informed discussions and develop evidence-based arguments for reform.

What are the challenges to labour reforms in the absence of robust labour statistics?

1)Social dialogue– Due to lack of credible data, evidence-based reform arguments that enrich social dialogue are not able to take place. As a result, social dialogue agency like the Indian Labour Conference (ILC) fail to push reform agenda.

2) Arguments by employer-Absence of credible date gives credence to the demands of employers who criticize the labour inspection system as a case of “Inspector-Raj” and push for employer friendly reforms. This demand is also endorsed by organizations like IMF and World Bank.
For ex– a study by Besley and Burgess (B&B) in 2004 has been frequently cited by employers and others to advocate for changes like easier hiring and firing

3) Closure reform– There is a lack of credible data on request for business closure and   approvals or rejections of these requests by the labor department. This data is mostly not publicly available, except for a brief period in Maharashtra.

4) Strikes-The Industrial Relations Code, 2020, makes legal strikes almost impossible and imposes heavy penalties for illegal strikes. Trade unions could have used data from the Labour Bureau on strikes and lockouts to argue against stricter strike rules in the Code.

What measures can trade unions take to contribute to evidence-based reform discussions?

1) They can gather statistics about various aspects of the labor market and industrial relations at the level of individual workplaces.

2) Trade unions can play a crucial role in reform discussions by producing labor statistics, conducting research on labor market dynamics, and engaging with academics to build evidence-based arguments.

3) Trade unions can influence policy decisions and promote worker interests by actively participating in social dialogue forums like the Indian Labour Conference and use empirical studies to support their positions.

Read more- Labour laws’ fairness challenge

What is the significance of improved labor statistics and evidence-based arguments on the reform process?

1) Improved labor statistics and evidence-based arguments can make reform efforts more credible and successful.

2) By sharing convincing data and empirical studies, trade unions can garner public support for their cause and push policymakers to prioritize labor reform efforts.

Trade unions should understand that reforms are debated not just through protests but also through evidence-based arguments using objective data and thorough studies.

Question for practice

What role can the Trade Union play to strengthen their advocacy and contribute to meaningful reform in labor institutions?