Crisis and Political Attack on the Wage Pressure from Below

April 3, 2014

[The following article is reproduced from the March 2014 issue of Gurgaon Workers News. – Eds]

Against the background of persistent inflation the ruling class in India has to actively curb the wage pressure from below. We document short examples of current struggles in the Gurgaon area and have translated one report about a riotous spill-over of workers’ discontent in Faridabad in January 2014.

In late 2008 the ruling elite in India was still able to talk about ‘de-coupling’. claiming that the Indian economy was sufficiently ‘autark’ enough not to be too affected by the global crisis. This claim was refuted by the ‘currency war’ in late 2010, when currencies in most ‘emerging markets’ bubbled up in competition for short-term investment. Industrial growth in India has since then been stifled by high interest rates, from 2.9 per cent in 2012 to a historic low of under 1 per cent in 2013.

The credit market in India has expanded significantly during recent years. Between 2000 and 2010 the ratio between consumer credits dished out by private banks and GDP increased from 20 per cent to 50 per cent. Outstanding foreign loans grew from 40 billion USD (5.7 per cent of GDP) in 2005 to 300 billion USD (16.2 per cent of GDP) at the end of March 2013. Since January 2012 the value of the Rupee declined by 35 per cent, which makes it more expensive to pay back these loans and to pay for imported goods, mainly gas and oil. At the end of 2013 the Iranian government refused a request by the Indian government to pay the gas bill in Rupees, instead they demanded a 55 per cent payment in USD and Euro, which is a sign of the international doubt concerning the stability of the Rupee.

In early 2014 the stock-market in India reacted in perfect synchrony with the other ‘emerging markets’ Brazil, South Africa, Turkey and Argentina and nose- dived after the announcement of the US government to curb their quantitative easing (economic stimulus program).

Wage Pressure
Under these conditions the ruling class in India has to make sure that the wage pressure from below is further suppressed. End of 2013 the chief minister of Haryana announced a substantial increase of the local minimum wage from around 5,500 Rs to over 8,000 Rs, but the central government interfered. In Business Standard the new boss of the Reserve Bank of India announced:

“More than pressuring corporate profits, these rapid blue-collar wage increases threaten efforts to quell inflation by new Reserve Bank of India (RBI) chief, Raghuram Rajan, the former International Monetary Fund economist who took over as governor at the RBI in September. Rajan has made price stability a policy priority, calling it a prerequisite for reviving economic growth that has slipped to 5 per cent a year, the lowest in a decade.”

On the parliamentary level it became clear fairly quickly, that although the Aam Admi Party is able to incorporate the ‘social movement’ sector of the left into their general election theatre, e.g. through the standing of Medha Patkar of the Narmada Bachao Andolan (NBA) as AAP candidate, once in power the AAP will, like any other party, make sure that proletarian living standards remain as low as they are: during their short ‘time in power’ in the NCR government the AAP threatened striking contract workers of the public transport corporation with mass redundancies and in media interviews an AAP spokesperson announced that ‘agricultural subsidies’ are the first thing to go after a possible AAP election success.

On a regional level the representatives of capital have made a deal to actively go against any struggle of workers’ which demands more than a 7,000 Rs wage increase over a three years period. The Maruti Suzuki and Hero managements must have given permission to management of their suppliers to enforce a ‘lock out policy’ in case workers’ exceed this threshold, even if the lock-out might put production in the assembly plants at risk. We find many such local examples of ‘lock-outs’ at major suppliers during the last six months: Munjal Kiriu, Autofit [1], Asti Electronics [2] and most recently Bajaj Motors.[3]

While management knows how to orchestrate wage disputes as long as these stay within the framework of the (company) trade union and labour law, this is less the case once workers go beyond this limit. A recent example from Faridabad demonstrates the wide-spread simmering discontent, which only waits for ignition.

Workers’ collectivity reaches out from one factory to the other
(translated from: Faridabad Majdoor Samachar no.308, February 2014)

It has been three months since the chief minister announced that the monthly minimum wage in Haryana will be increased by around 2,500 Rs to 8,100 Rs on 1st of January 2014. In the early morning of the 23rd of January our company bus crossed the JCB Square when traffic on both directions started to build up. In the end the traffic jam was thirteen to fourteen miles long. A side-street was free of traffic, so the bus driver took that route. We reached the 49 mile stone near Prathala on the National Highway no.2 by 8:30 am and there we saw about 500 workers standing on the side of the road shouting slogans for “8,100 Rs” and against the government and the companies. The reason behind the long traffic jam was workers’ unrest in the industrial area of Prathala-Baghaula.

The strike of public workers on 21st, 22nd and 23rd of January had encouraged these workers, but on the 21st and 22nd of January the roads had remained unblocked. On the 22nd of January groups of workers had started walking from one factory to the other. A mix of garment, auto and pharmaceutical companies like Vishani Lux, Boya Medical, Haryana Wire, Mahindra, Varmani Overseas, SKH, Mahrani Paints and Auto Ignition were shut down. Workers had also entered the offices of the factory bosses and told them to leave. Permanent and temporary workers, middle-management and management all stood in front of the Auto Ignition factory when at about 10:30 am a police jeep arrived and the police men told the crowd to go back in and that they would see to it. After that 850 people went back inside. After the police jeep had left at about 11:15 am a group of 250 workers turned up again in the factory and told everyone to come out again. A local trade union leader also turned up. Management told the workers that a union rep had arrived and that they should listen to him. All people gathered on a grassy area on the factory premises. The leader said that everyone should remain peaceful and that he would talk to the management. After a meeting between management and leader the company announced the 23rd of January to be a day off. In the whole area factories remained shut down on the 23rd. On the 23rd no workers was arrested during the protests. There was talk of keeping the factories closed for four days. On the 24th from early morning onwards there was a huge police force present in the area. When the factory bus arrived at the factory on the 24th there were four jeeps and one police bus waiting. During the meal-breaks there were also a lot of police around. The Senior Superintendent of the Police (SSP) from Palwal arrived at the factories in order to reassure management that things are under control. The factories were running.

The Faridabad Industries Association complained to the state government. They said that unruly elements had entered the factories and caused trouble and mayhem. If the police could, they would turn up, but facing the rebel crowd they would silently withdraw. Armed with sticks these people had entered and said that the factory was not suppose to run until Monday. This group of workers had not previously contacted the trade unions or organisations. None of the trade unions had ordered that the factories should be shut down. Under these circumstances it is difficult to keep production running. According to announcements of the joint secretary of the Industries Association the police had filed a case against 10 unknown youth and arrested 18 workers.

At Indo Autotech, Plot 332 in Faridabad Sector 24, management changes with each shift. Management announced that the new shifts would be from 8 am till 8 pm. On 31st of January workers wanted to leave at the usual time of 5 pm, but management shut the gates and called the police. The police arrived in jeeps and in a bus. At every exit police were stationed. At this point workers said that they don’t care whether management let them go or not, that in any case they would not work. For three hours workers strolled around in the factory, but the machines did not run.

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[1]

http://gurgaonworkersnews.wordpress.com/gurgaonworkersnews-no-961/#fn6

[2]

http://gurgaonworkersnews.wordpress.com/gurgaonworkersnews-no-951/#fn19

http://sanhati.com/articles/9242/

[3]
From a Gurgaon Workers Solidarity Centre report:
On the NH-8 stretch from Gurgaon to Manesar, the largest concentration of two-wheeler production in the world, the workers of Bajaj Motors are on a sit-down protest at the factory gate since the morning of 24th February. On Monday 24th Feb when A-shift workers came to work, they found a list of suspension orders against 15 workers, while others were asked to sign a humiliating ‘Good Conduct Bond’ to go inside. On Sunday, in preparation, 150-200 DT (Diploma Trainee or another name for contract) workers had been called by the company on overtime, and were being forced to work in conditions of near-bondage, abused and even threatened to be physically assaulted, and arrangements made with a tent on the rooftop so they could stay overnight within the factory premises itself. On the morning of Tuesday 25th February, one worker from among the DT workers inside, fractured his leg while attempting to jump from over the wall of the factory premises running away from this forced labour. Production is practically at a halt with less than 10% taking place by the 150-odd workers as all the other around 1500 workers have been on a sit-down protest at the gate ever since. Workers here send parts for 15,000 bikes everyday, producing 22 engine parts like shafts and planks to Hero Motorcorp (Gurgaon, Haridwar, Dharuhera), Suzuki Motorcycles, Mahindra two-wheelers, New Holland Tractors, and so on. During the struggle at present, workers seek to turn this production chain into a chain of resistance appealing to the workers in 3 other Bajaj Motors plants (of its 11 total plants) in nearby Manesar, Binola and Bawal to come in support of a larger struggle. The plant in Gurgaon has around 1500 workers of which 283 are permanent with wages around Rs.10-12000 while the rest are contract workers of various categories who are given the Haryana minimum wage for unskilled workers of Rs.5342. Whereas the work required is of a highly skilled nature, the bulk of the work is foisted on contract workers whose skewed ratio compared to permanent workers is even admitted by the management. The contract workers also find themselves terminated from their jobs after every 6-7 months; there’s another category of around 300 contract workers called DT (diploma trainee) who are never made permanent, working for 1-2 years.

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