Labour shortage hits agriculture and industrial sectors
By Gamini Warushamana
"In proportion as the bourgeoisie, i.e. capital, is developed, in the
same proportion is the proletariat, the modern working class, developed
- a class of labourers, who live only so long as they find work, and who
find work only so long as their labour increases capital. These
labourers, who must sell themselves piecemeal, are a commodity, like
every other article of commerce, and are consequently exposed to all the
vicissitudes of competition, to all the fluctuations of the market," -
Communist Manifesto.
Sarath Peramuna (50) in Kegalle, who had been a farm labourer for
over 20 years, is now working as a helper in the construction industry.
He has abandoned working in paddy fields for the past four years.
Over 10 hectares of paddy in his village have been abandoned for the
second consecutive year, mainly due to the labour shortage. Almost all
farm labourers in the village have migrated to the construction sector.
The reasons for abandoning farm work, according to Peramuna are
higher wages and comparatively less demanding work in the construction
sector. "In paddy fields we have to work continuously for six or seven
hours in the sun or rain and the wage is only Rs. 700 per day.
In the construction sector, the wage is Rs. 1,000 and work is also
easy," he said.
The agricultural sector which always suffers due to market failure
cannot absorb any wage increase. Even with the Government's fertiliser
subsidies, paddy farmers suffer losses and every season the market price
of paddy falls below the cost of production despite promises the
government in power makes.
Vegetable and other farm products too suffer frequent fluctuations in
price and adverse weather conditions.
As a whole, the agricultural sector does not have space to adjust
cost, especially the wage cost, to match the demand in the labour
market.
The Ministry of Agriculture recently decided to recruit Indian
labourers for paddy harvesting in the North and the East.
However, considering the security issues the decision was later
called off. This incident spotlighted the gravity of the issue. Economic
analysts said that the labour shortage is a serious challenge that Sri
Lanka faces in development.
Plantation sector
Tea plantations are another sector that is experiencing a severe
labour shortage. According to the Director of the Tea Research Institute
(TRI), Dr. Sarath Abeysinghe labour availability in the tea sector has
declined by 50 percent from the 1980s. Large plantation companies and
medium scale tea growers face issues.
There is a shortage especially of tea pluckers. The industry needs
tea pluckers on a daily basis, he said.
There are multiple reasons, economic, social and demographic for this
issue. Although the tea industry is centuries-old, the working culture
in the industry has not changed.
Most of the manual work cannot be changed in this industry. We have
been using the same technology for centuries. Workers are involved in
manual work from 7.30 am to 5.30 pm.
The work is also tough and they have to work in the sun or rain, in
chilly weather and walk long distances on hilly terrain.
With all these hardships a worker gets a daily wage of Rs. 570,
inclusive of EPF and ETF and this is just half the wage of a
construction worker.
Therefore, the sector is no longer attractive to the younger
generation and new strategies have to be introduced to attract them. In
the tea industry too, there is no space for a huge wage increase and the
cost of production is already high compared to our competitors in other
countries.
Dr. D. Lakshman of the Rubber Research Institute (RRI) said that the
rubber sector was affected by the labour shortage.
This sector needs regular labourers, especially tappers. Today, most
of the plantation companies and smallholders face a crisis.
"Some of the tappers demand half the harvest as wages. However, the
extent they can tap a day is limited and by valuing what they can earn a
day by this method, we can figure out that the wage they demand is
around Rs. 1,000 per day. The low wage of Rs. 570 per day is the main
reason for the labour shortage," he said.
Trade union sources confirmed that there is a severe labour shortage
in the manufacturing sector. Joint Secretary of the Free Trade Zone and
General Service Employees Union, Anton Marcus said that according to the
Deputy Minister of Economic Development, Lakshman Yapa Abeywardena there
are 80,000 labour vacancies at the Katunayake Free Trade Zone (FTZ), the
first FTZ in the country and around 40,000 vacancies at the Biyagama
FTZ.
Industrial sector
Free trade zones were set up in Sri Lanka in the late 1970s to tap
the abundant labour in Sri Lanka for low-end manufacturing industries
such as apparel.
The Free Trade Zones were designed to provide investors the freedom
to exploit labourers. Even though according to the BOI law, workers have
the right to form trade unions, in reality the workers in the EPZs have
no bargaining power. For instance, even today some companies do not
permit employees to form trade unions in factories.
Initially, the unemployed rural youth flowed into FTZs in the Colombo
suburbs. This labour outflow from rural areas created a labour shortage
in the agriculture sector. Initially, most of the opportunities were for
female workers. The wage they received was very low and the workers had
to spend money for lodging and meals and to cover all these expenses and
to save some money they had to work long hours.
The working conditions in these manufacturing industries were not
attractive in any form; the wages, other facilities or the cost they had
to incur.
Therefore, the attrition rate was high and shortage of labour in the
industrial sector was felt even in the late 1980s and early 1990s. The
transit of apparel industries to rural areas commenced with this crisis
and today most of the leading apparel exporters manufacture in rural
areas.
While the cost-of-living is increasing by leaps and bounds, without
giving bargaining power to workers, extremely low wages could be
maintained in the FTZs. According to Marcus, until this year the minimum
basic monthly salary of a factory worker in the FTZs under the BOI was
only Rs. 7,900. This year it was increased to Rs. 9,500 per month.
It is true that workers earn an extra income by working overtime. But
this wage rate is low compared to the construction sector, where a
helper earns over Rs. 1,000 for an eight-hour working day.
Exploitation is the norm of capitalism and all incentives have been
designed to get the maximum from the worker and give nothing back.
Macus said that workers are not entitled to the attendance bonus of
around Rs. 1,000-1,500 per month if they are absent even for one day.
Production targets designed unilaterally by the employers or managers
is another mechanism and in some factories workers take a 10-minute
lunch break to cover their targets though they are entitled to a
one-hour lunch break by BOI law.
Some factories have limited the water consumed by workers to reduce
the number of times they use the toilet. The working environment of most
of the factories have improved over time, for the one purpose, to get
more from the workers.
However, nobody considers the social cost of these working
conditions. According to a study conducted at the Katunayake FTZ, 66
percent of the employees are suffering from anaemia, he said.
The repercussion is the decline in labour supply. At the early
stages, workers of the FTZ, work five-six years and go back to their
village and send a sister or friend to work.
Today, they leave and do not send relatives or friends, because the
conditions are bad on the one hand and on the other there are better
opportunities in the market, he said.
Solutions
Economic analysts say that to face the crisis, changes are essential
in these industries to make them more attractive for labourers. Chief
economist of the Central Bank, S. Gunaratne said that wages and other
facilities should be increased. Some big companies have understood this
and they have overcome the issue to some extent. On the other hand some
big apparel manufacturers have shifted their factories to Bangladesh,
she said.
Wages should be increased in keeping with the changes in the economy
and today the per capita GDP has increased and poverty has declined.
Therefore, people are better off and their spending pattern has changed.
People use mobile phones and various other equipment and to purchase
these they need money.
Labour migration overseas and the availability of better jobs in the
services sector are other reasons. There is a structural change in the
economy and the service sector makes the highest contribution to the
economy.
However, 35 percent of the workforce still work in the agriculture
sector. Technological improvement is another solution and increasing
mechanisation in agriculture, especially in paddy harvesting, has become
a solution to the issue up to some extent, she said. Dr. M.A. Wijeratne
of the TRI said that attempts have been made to make the tea industry
more attractive to the younger generation by introducing new technology
and a better working culture.
A selective tea leaf harvester, light weight plucking basket and
other tools have improved labour productivity and thereby increased the
daily earnings of labourers. Some estates have introduced uniforms with
all these tools and have changed the attitudes of the younger generation
successfully.
Dr. Lakshman of the RRI said that the proposed monthly salary
structure will be helpful in meeting the issue to some extent because
job security is also a major concern of labourers. However, Dr.
Wijeratne said that this will not be helpful in addressing the issues in
the tea sector.
In the industrial sector there are various attempts to address the
issue by individual companies and industry associations. Most of them
are promotional programs such as awareness programs, to raise the social
image of workers. Marcus said that the Joint Apparel Association Forum
(JAAF) introduced films and songs about apparel workers to attract more
labourers but had not addressed the real issues - paying reasonable
wages to workers and, therefore, these campaigns failed.
Those who advocate this so-called industrial peace in the FTZ would
have thought that without trade unions they could ensure low cost labour
forever. They may have ignored the basic principals of the capitalist
economy, market mechanism and labour market too functions accordingly.
Or else, they may have known that the season of low wage labour is
limited to a decade or two and industries have to shift to other regions
in the globe once cheap labour is depleted.
This happened in the neo liberal development era.
These low-end labour intensive industries first shift from developed
countries to East Asia, then from East Asia to South Asia, China,
Vietnam and Latin America.
Now industrialists sense low cost labour in the African continent
with peace, improving human development index and democracy.
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