The COVID-19 crisis has drawn attention to the insecurities that haunt the lives of the urban poor. Generally, they are less insecure than the rural poor, partly because fallback work is easier to find in urban areas — if only pulling a rickshaw or selling snacks. Still, the urban poor are exposed to serious contingencies, both individual (such as illness and underemployment) and collective (lockdowns, floods, cyclones, financial crises and so on).
There is, thus, a need for better social protection in urban areas. There are not many options. Universalising the Public Distribution System in urban slums would be a step forward (and it can be done under the National Food Security Act), but foodgrain rations do not take people very far. Employment-based support is one way of doing more. It has two major advantages: self-targeting, and the possibility of generating valuable assets or services.
A simple proposal
There has been much discussion, in recent months, of a possible urban employment guarantee act. The nuts and bolts of the act, however, are not so clear, and we have little experience of relief work in urban areas. Further, it takes some optimism to expect a national urban employment guarantee act to materialise in the current political climate. A stepping stone would help.
Some time ago I had proposed an urban employment scheme called Decentralised Urban Employment and Training (DUET). Briefly, it would work as follows (https://bit.ly/33N41zy). The government, State or Union, would issue “job stamps”, each standing for one day of work at the minimum wage. The job stamps would be liberally distributed to approved public institutions such as universities, hostels, schools, hospitals, health centres, museums, libraries, shelters, jails, offices, departments, railway stations, transport corporations, public-sector enterprises, neighbourhood associations and urban local bodies. These institutions would be free to use the stamps to hire labour for odd jobs and small projects that do not fit easily within their existing budgets and systems. Wages, paid by the government, would go directly to the workers’ accounts against job stamps certified by the employer. To avoid collusion, an independent placement agency would take charge of assigning workers to employers.
This approach would have various advantages: activating a multiplicity of potential employers, avoiding the need for special staff, facilitating productive work, among others. It would also ensure that workers have a secure entitlement to minimum wages, and possibly other benefits.
There is no dearth of possible DUET jobs. Many possibilities are mentioned in Azim Premji University’s blueprint for an urban employment guarantee act (https://bit.ly/3lSCUsU). Further, many States have a chronic problem of dismal maintenance of public premises — DUET could provide a first line of defence against it. Some projects may require a modest provision for material expenditure, but that seems doable.
To work well, DUET would have to include some skilled workers (masons, carpenters, electricians and such). That would widen the range of possible jobs. It would also help to impart a training component in the scheme — workers could learn skills “on the job”, as they work alongside skilled workers. Roping in skilled workers, however, will take some effort: they tend to get a fair amount of work in urban areas, and to earn relatively good wages.
Aside from prompting a lot of useful and mostly enthusiastic feedback when it was placed in the public domain, the DUET proposal was the subject of a recent symposium by ‘Ideas for India’ (https://bit.ly/3qycBMh), where many eminent economists shared valuable thoughts and doubts. I am told that the Left Democratic Front in Kerala has included it in its election manifesto for the forthcoming local elections. Of course, many practical issues are likely to arise in the design of the scheme. But the idea seems worth pursuing at least.
Here is a variant of DUET that merits special consideration — how about giving priority to women workers? I am not thinking of a minimum quota for women, like the one-third quota under the National Rural Employment Guarantee Act (NREGA), but of an absolute priority: as long as women workers are available, they get all the work. In fact, women could also run the placement agencies, or the entire programme for that matter.
To facilitate women’s involvement, most of the work could be organised on a part-time basis, say four hours a day. A part-time employment option would be attractive for many poor women in urban areas. Full-time employment tends to be very difficult for them, especially if they have young children. Wage employment for a few hours a day would be much easier to manage. It would give them some economic independence and bargaining power within the family, and help them to acquire new skills. Remember, the economic dependence of women on men is one of the prime roots of gender inequality and female oppression in India.
Giving priority to women would have two further merits. First, it would reinforce the self-targeting feature of DUET, because women in relatively well-off households are unlikely to go (or be allowed to go) for casual labour at the minimum wage. Second, it would promote women’s general participation in the labour force. India has one of the lowest rates of female workforce participation in the world. According to National Sample Survey data for 2019, only 20% of urban women in the age group of 15-59 years spend time in “employment and related activities” on an average day. This is a loss not only for women, who live at the mercy of men, but also for society as a whole, insofar as it stifles the productive and creative potential of almost half of the adult population.
I would add, on a more tentative note, that giving priority to women (and putting them in charge) may help to prevent corruption. If wages are paid directly to the workers’ accounts, siphoning DUET funds off would require collusion with workers, real or dummy. Women may be more reluctant than men to participate in a scam, if only out of fear.
Try it out
A moot question remains: will the public institutions concerned make active use of the job stamps? Think of the head of a university department who sees that the walls need white-washing. It would not take much initiative for her to reach for the job stamps and get the job done. Still, it is easier to do nothing.
This is where there is a big difference between DUET and the “service voucher” schemes that have proved so popular in some European countries. The service vouchers are much like job stamps, except that they are used by households instead of public institutions, for the purpose of securing domestic services such as cooking and cleaning. The service vouchers are not free, but they are highly subsidised, and households have an incentive to use them since that is a way of buying domestic services very cheap. In the DUET scheme, the use of job stamps relies on a sense of responsibility among the heads of public institutions, not their self-interest.
It is, thus, not easy to guess how intensively job stamps will be used. The best way to find out is to give the scheme a chance. As it happens, that can easily be done, by way of a pilot scheme in select districts or even municipalities. There is nothing to lose: if DUET does not work, we shall learn from it at least.
Jean Drèze is Visiting Professor at the Department of Economics, Ranchi University