Informal Service Sector Research Articles

Structural and Behavioural Characteristics of Informal Service Employment: Evidence from a Survey in New Delhi

This article argues that at least two distinct categories within the informal sector - informal services and informal manufacturing - exhibit different structural and behavioural characteristics. While some segments of informal manufacturing may indeed be 'dynamic' as noted by some recent studies, the hypothesis is tested for the informal service employment on the basis of a survey by the author in New Delhi, India. It examines investment, earnings, returns to human capital, socio economic characteristics and scope for upward mobility of informal service employment. It finds formal education does not explain differences in earnings in the sample but background characteristics do; earnings in the informal service sector are neither the lowest in the economy nor are they comparable to wages in the urban formal unskilled sector, when differences between migrants and non-migrants are taken into account. On the basis of these results, the paper reflects on the nature of growth and structural change in the Indian economy and draws some analytical and policy implications.

Child Slaves in Modern India: The Bonded Labor Problem

Child Slaves in Modern India: The Bonded Labor Problem Lee Tucker (bio) My sister is ten years old. Every morning at seven she goes to the bonded labor man, and every night at nine she comes home. He treats her badly; he hits her if he thinks she is working slowly or if she talks to the other children, he yells at her, he comes looking for her if she is sick and cannot go to work. I feel this is very difficult for her. I don’t care about school or playing. I don’t care about any of that. All I want is to bring my sister home from the bonded labor man. For 600 rupees I can bring her home—that is our only chance to get her back. We don’t have 600 rupees . . . we will never have 600 rupees. —Lakshmi, 1 nine-year-old beedi roller, Tamil Nadu. Six hundred rupees is the equivalent of approximately seventeen US dollars. I. Introduction “Bonded child labor” refers to the phenomenon of children working in conditions of servitude in order to pay off a debt. 2 In India, there are an [End Page 572] estimated fifteen million bonded child laborers, and possibly more. 3 The debt that binds them to their employer is usually incurred by a parent, and ranges on average from 500 rupees to 7,500 rupees, 4 depending on the industry and the age and skill of the child. The creditors turned employers offer these “loans” to destitute parents in order to secure the child’s labor at an extremely low rate of pay. Typically, the parents accept the loans in order to meet subsistence needs, pay for funeral or marriage costs, or replace income lost due to illness or death. Children sold into bondage work long hours over many years in an attempt to pay off the debts that bind them. Due to the astronomically high rates of interest charged and the abysmally low wages paid, they are usually unsuccessful. As they reach maturity, some of them may be released by the employer in favor of a newly-indebted and younger child. Many others will pass the debt on, intact or even higher, to a younger sibling, back to a parent, or to their own children. As much as 85 percent of Indian bonded child labor is in agriculture. 5 The balance is found in domestic and export industries and in the informal service sector. Industries with significant child bondage include silk, beedi (hand-rolled cigarettes), silver jewelry, synthetic gemstones, leather products (including footwear and sporting goods), handwoven wool carpets, and precious gemstones and diamonds. Services where bonded child labor is prevalent include prostitution, hotel, truck stop and tea shop services, and domestic servitude. Poverty, while significant, is only one of many factors that contributes to bonded labor in India. Other elements include: an ancient tradition of slavery and debt bondage; the lack of small-scale loans for the rural and urban poor; the lack of a concerted social welfare scheme to safeguard against hunger and illness; a noncompulsory and grossly inadequate educational system; the lack of employment opportunities and living wages [End Page 573] for adults; an ossified stratification of occupations, with little opportunity for upward mobility or intergenerational career changes within families; corruption and indifference among government officials; and endemic societal apathy. A final, omnipresent element is the caste system, which is closely intertwined with debt bondage. Notwithstanding the prevalence of the practice, child debt servitude has been illegal in India since 1933, when the Children (Pledging of Labour) Act 6 was enacted under British rule. Since Independence, a plethora of additional protective legislation has been put in place. There are laws governing child labor in factories, in commercial establishments, on plantations, and in apprenticeships. There are laws governing the use of migrant labor and contract labor. The Child Labour (Prohibition and Regulation) Act of 1986 7 regulates work hours and conditions for all child workers and prohibits the use of child labor in certain enumerated hazardous industries. 8 (There is no blanket prohibition on the use of child labor, nor any minimum age set for child workers.) The most significant legal...

Migration in a Small Semiperiphery: The Movement of Puerto Ricans and Dominicans

"This article argues that the semiperipheral development of Puerto Rico since around 1975 has led to the creation of a relative labor surplus in the formal sectors of the economy while at the same time increasing the demand for cheap labor in the informal service sector. Thus, Puerto Ricans leave their country in search of good jobs in the United States while Dominicans migrate to Puerto Rico and find work in the informal sector. The return migration of Puerto Ricans has also been significant, but is due to their strong national culture, rather than economic reasons. The article concludes that migration to and from Puerto Rico is of a semiperipheral type because it combines characteristics of migration previously described as 'migration from the periphery to the center' and 'migration within the periphery.' A precise definition of the semiperipheral characteristics of Puerto Rico is given."