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'Flexi' firms, rigid realities

By Nandita Gandhi

With liberalisation, many industries relocated, subcontracted and downsized. Many women workers had to retire or were retrenched. In the plastic processing and diamond polishing units in Mumbai, employers have brought in young women as workers for lower-end jobs at lesser wages. When jobs are subcontracted, older women often do the same work in an informal setting on a piece rate system

In the 1980s, a substantial number of young women were inducted into the readymade garments and electronics industries. By the late 1990s, a growing number of women were being employed in BPOs and ITES, or call centres and back office data entry work. Statistical analysis for 1983, 1987-88, 1993-94, 1999-2000 and 2004-05 shows the work participation rate of women increased to some degree, especially in urban areas (Mitra; Chandrashekhar and Ghosh). About 5% more women, mainly younger women, joined the labour market in 2004-05.

Does this mean that the new policies that came in with globalisation have been beneficial for women workers?

A more 'open' market led by exports was expected to trigger an employment boom. Instead, the new economic policies of liberalisation, privatisation and deregulation have given rise to what has been called 'jobless growth'. The work participation rate of 15.1% for urban women in 1983 dipped to 13.9% in 1999-2000, then increased to 16.6% in 2004-05. The manufacturing sector showed a marginal increase from 26.7% in 1983 to 28.2% in 2004-05.

We need to therefore read between the lines: if more women have reported that they are regularly employed, many have also said that they are self-employed, mostly in home-based work or domestic service.

In 1996, we interviewed 360 women from 94 plastic processing firms and 73 diamond firms (1). The selection of women workers was based on age, marital status, number of years in employment, religion, and size of the firm. Our interview schedule had 157 questions covering a range of issues including the nature of work, union activity, and household strategies. Our aim was to understand the micro, localised effects of macro changes at the firm or production level in the context of women's employment.

Through a process of selection, we picked the plastics processing and diamond polishing and jewellery industries. Both employed a substantial number of women, had small, medium and large production units, and had been impacted by liberalisation policies in different ways. The plastics processing industry was severely affected because market protection in the form of subsidies and restrictions were being withdrawn. On the other hand, the diamond industry was favoured for its export performance and had benefited from the lifting of monetary rules and tariffs.

Uncertain work, insecure workers

In profiling women who had been inducted into the plastics processing and diamond polishing and jewellery industries, we found that they were mainly Maharashtrian (Hindus from non-Brahmin castes), living in the working class colonies of Jogeshwari, Borivali, Malad, Dharavi and Dahisar. Some of them were daughters of the early textile workers who had settled in Mumbai after migrating from the Konkan region of Maharashtra . The majority of respondents were young, literate and unmarried. They lived in nuclear households of four to five people, at poverty levels.

For most of the workers we interviewed, 'security' was synonymous with permanent employment. We used employment security, income security and security of organisational representation to arrive at a categorisation of labour status. Only 9% of women had the three basic securities. We have called them the 'secure' workers. The majority, or 52%, were 'insecure' workers. This categorisation helped us understand the nature of work done by the women, and their status in the labour force.

The plastics processing or product industry, often subsumed under plastics, rubber and allied products, is a growing industry but located at the lower end of the Indian industrial spectrum in terms of net value added, output and profits. The diamond polishing and jewellery industry is an export-oriented industry with skilled workers. Both have been differently impacted by the new economic policies. The plastic products industry was adversely affected because cheaper goods from East Asia poured into the Indian market. The diamond industry has benefited from lower duties, import facilities and tax holidays from as far back as the 1960s.

Employers from both industries gave an off-the-cuff estimate of 10% women in the total number of workers. However, in our sample, the ratio of women workers to the total number of workers was much higher. A discrepancy between perception and reality was also evident in the employers' rationale for the induction of women. They projected the women as uneducated, unskilled and suited only for lower-end jobs. In contrast, according to the women workers, they were semi-literate, had the capacity for skilled jobs and did overtime.

In both industries, employers followed the established practice of giving women 'light' tasks like sorting, finishing, packing, checking, polishing, and supportive tasks. But the workplace is not neutral in terms of gender, caste or region. It, in fact, produces and reproduces prevalent social practices. Our data showed a clear gender, caste and region-wise hierarchy in the workplace, which employers successfully used for the organisation of tasks, hierarchy, and composition of workers.

A 'flexibility' that is limiting

The sweeping changes in Western economies during the 1970s and 1980s, a realignment of international capital, technological innovation, the decline of the manufacturing sector and the success of Japanese production techniques encouraged the return to a more conservative economic model of deregulation and privatisation. These changes were interpreted by academics and policymakers as a crisis in the dominant, post-World War system of mass production or the 'Fordist' model, and the emergence of what came to be called the 'flexi firm' model and the notion of flexibility, or 'the capacity to change'. According to Piore and Sabel, flexibility was introduced by a vertical disintegration of the manufacturing process into a number of individual 'flexibly specialised' firms, which functioned with mutual cooperation as a network, with computer-controlled machines and a skilled labour force.

One of the main purposes of industrial restructuring was numerical and functional flexibility so firms could gear up to face price and quality competition. Organisational structure flexibility involved decisions on relocation of the firm to subsidised areas or places with cheaper infrastructure costs. Physical shifts, sub-contracting non-core processes, or splitting firms usually left women out by retiring them through schemes, retrenching them, or pushing them out to sub-contracted smaller firms. Either way they were bereft of a job or were relocated to a non-formal sector environment.

Large and medium-sized formal sector firms were more likely to use the new flexibility strategies for the creation of a flexible labour force. This meant that women belonging to the 'secure' category of workers were most likely to be affected by changes such as automation and the clubbing of tasks, relocation of the plant and sub-contracting of production. Medium and small firms intensified their use of labour market flexibilities to push the 'moderately secure' and 'insecure' women to further insecurity. Women continued doing poorly paid jobs and backbreaking overtime as they waited for that fearsome moment of dismissal.

It is common for firm managements to upgrade machinery and technology to improve their products and costs. But the economic reforms had made this an issue of survival. Newer production methods like casting instead of using moulds for jewellery, laser diamond cutting machines, and sophisticated machines that integrated tasks for plastic products were being adopted. Flexible strategies of production brought together technological changes and retraining of workers, and broke down rigid task and skill divisions between workers.

However, only a few women benefited from the retraining process. The majority were declared redundant when their lower-end, unskilled jobs were merged with men's work. Some of the advantages of 'flexibilisation', as seen by Piore and Sabel, such as skill enhancement, had bypassed women. Our data shows that women have been de-skilled by flexibility strategies especially in large units, except in a few cases in the diamond processing and jewellery industry. The terms 'core' and 'periphery' workers were used by Atkinson to show the bifurcation of workers into a permanent and skilled group, as against the insecure ones. The concept of 'core' and 'periphery' is problematic dualism but it does indicate a process of selection, which leaves behind women.

Labour market flexibility strategies were used also to control the number and wages of workers. In both industries and amongst all firms, the strategy was traditional -- using the piece rate and daily wage systems to keep the wages of workers under control. Managements have also been campaigning for amendments to protective labour laws so as to get the right to hire and fire workers according to their production levels.

Manufacturing change

The early readymade garments and electronics industries drew in hundreds of young women but gradually shifted to countries like Sri Lanka and Bangladesh . Today, BPOs and ITES are attractive employment sites but they employ a miniscule number of English-speaking, educated, young women. The large numbers of semi-literate and semi-skilled women are drawn towards the manufacturing sector. More young women (in 1996) were being employed in small and medium-sized factory units.

There is a co-relation between our data, gathered in 1996-97 as the policies of liberalisation were being implemented, the analysis of the five rounds of NSSO (National Sample Survey Organisation) studies, and the conclusions of scholars on women's employment.

NSSO data shows a slight increase in women's employment in the manufacturing sector. But it is not as substantial as projected by the export-oriented, market-led economic model. Our data provides some possible answers. Multinational corporations quickly took advantage of the opening up of the Indian economy and flooded the market with their goods. Indian industry had to re-structure itself in order to survive and compete. Most industries jettisoned the Fordist model of manufacture for the Japanese variety of 'flexi' firms. Large firms of both the plastics and diamond industries relocated to rural areas or special zones, or split units and sub-contracted some of their products to smaller units. It was impossible for women to relocate because of domestic considerations, so they were the first to be retrenched from the bigger industries.

Similar to NSSO data, our study showed that employers were bringing in young, 'fresh' women in both industries. Our data showed that employers had a shrewd sense of strategy. They combined gender stereotypes and gave lower-end jobs to women who became a back-up group; this also divided the workforce. New workers worked for lower wages. The women's own limited objectives for employment, lack of skills and their domestic labour to some extent overlapped with their employers' needs. Women not only accepted the tasks allocated to them, but faced changes in the workplace without protest. It was much easier and cheaper to hire, displace and retrench women than men workers.

Medium and small firms also sub-contracted workers to make specific products. Usually, older workers were asked to take over the job. This resulted in a group of women moving to more informal settings but doing the same work under a new and often tougher boss. Labour market flexibility measures included putting workers on a piece rate or daily wage system. This saved the employer monthly wages in the face of low orders and shortage of raw materials. Changes in the production process took place with automation and computerisation. Workers were expected to rotate jobs and be multi-skilled. Women, once again, lost out as they were often reluctant to operate machinery.

NSSO data shows that more women reported regular work as well as self-employment. In the manufacturing sector, the subsidiary as versus the principal category has been steadily increasing since 1987-88 and covers nearly 3% of all urban women workers. The neo-liberal economic model has undoubtedly opened up avenues for women workers in the tiny BPO and IT-related sector. It has given a vision of more and better employment. But in the manufacturing sector, women's hopes have withered as they face voluntary retirement, retrenchment or insecurity as a result of relocation, automation, downsizing and sub-contracting.

(Nandita Gandhi is an activist of the contemporary women's movement and founder member and director of Akshara, a women's resource centre in Mumbai, working for gender equality. She has written books and papers on women's issues. This study, titled 'Contingent Workers: Women in Two Industries in Mumbai' was conducted by Nandita Gandhi and Nandita Shah. It was done as part of their dissertation for the University of Amsterdam, The Netherlands)


  • Atkinson J, Meager N (1986). 'New Forms of Work Organisation' . IMS Report 121; Institute of Manpower Studies, Brighton
  • Bose A J C (1996). 'Subcontracting, Industrialisation and Labouring Conditions in India : An Appraisal'. Indian Journal of Labour Economics; Vol 39, No 1
  • Chandrashekhar C P, Ghosh J (2007). 'Women Workers in Urban India '.
  • Mitra S (2006). 'Patterns of Employment of Female Workers in India : Analysis of NSSO Data (1983 to 1999-2000)'. EPW; Dec 2, 2006
  • Piore M, Sabel C (1984). The Second Industrial Divide . Basic Books, New York

InfoChange News & Features, September 2007