Labour Welfare

Labour Welfare – problems and issues

Land is an indispensable but a passive factor production in economics. No production is possible without the use of labour. We cannot expect any production without labour i.e., why it is said to be an indispensable and active factor of production. Labour is one of the main factors which constitute the material foundation of society.

In agriculture, labour problems do not arise because of the presence of cooperative mentality. Workers and owners of means of production work together with a sense of cooperation and therefore they do not think in terms of their exact share and the exploitation in the hands of the owners. In agricultural sector mainly family farming prevails where everybody thinks in terms of contributing towards production.

Even if some of the person is removed from this sector, the production remains unaltered and therefore total production is same and the problem of disguised unemployment is faced by this sector. It means agricultural sector does not realise labor problems, however they crop in the system itself.

The labour ratio being higher, agricultural holdings have become very small and uneconomic. All these factors have brought a radical change in the agrarian Indian society. Consequently various problems are arising out of the new situation e.g. the problem of unemployment; social security and industrial relations etc. are the outcomes of the process of industrialisation.


Wages are a payment for the service of labour, whether mental or physical. Though in an ordinary language an office executive a minister or a teacher is said to receive a salary, a lawyer or a doctor a fee, and a skilled or unskilled worker a wage, yet in economics no such distinctions are made for different services and all of them are said to receive a wage.

Wages in India are very low. A thorough analysis of the index number of cost of living, money and real earning, may reveal the right of the workers. Effort were made to ameliorate the grievances of workers and the British Government appointed a commission to go into the matters of labour the commission (Royal Commission) suggested exploring the possibilities for fixing up machinery which can look into the matter of the wages but due to certain administrative difficulties the idea was dropped. After Independence, the Minimum Wage Act was passed in 1948 and this Act has been amended subsequently from time to time.


The trade union is a unique organisation in that it explicit, indeed sole, purpose is to protest. The basic fact that has to be firmly grasped is that trade unionism is a system of opposition and not of government, and that unions cannot be responsible for managing anything except their own internal affairs.

Trade unions exist to oppose exploitation in such diverse organisations as factories, banking and insurance companies, government bureaucracies, universities, research institutions and even cooperatives. Inequality is universal to the distribution of money and power in modern industrial society.

Of course, some organisations are economically and politically more exploitative than others. Trade unions have a number of methods open to them to go about the job of protecting against inequality and ensuring a more egalitarian distribution of economic gain and political power. They may negotiate with the management the terms and conditions under which their members are employed.

They may bring pressure to bear on the government to enact legislation that will ensure a better deal to working men. But their most important weapon, and one which unions have fiercely clung to throughout their history, is the collective withdrawal of labour, otherwise called the strike.

The collective withdrawal of labour would be meaning less if the employer were permitted to get others to do the job of striking men. Hence the reliance of unions on picketing, preventing the entry of black-logs and strike breakers of all kinds.  

Stated boldly disruption of normal industrial production and the provision of essential services is an inevitable consequence of the pursuit of legitimate trade union activity. Unions cannot protest except through disruption.

The problem of collective bargaining and industrial democracy has become most complicated. It has generally found that no solution is equally acceptable to employers as well as to employees. There are strikes and lockouts on account of low wages, long working hours, bad working conditions, non-payment of dues and bonus, absence of security of employment, absence of medical aid and victimization

Employment Security

Lod Keynes diagnosed unemployment in advanced economies to be the result of a deficiency of effective demand. It implied that in such economies machines become idle and demand for labour falls because the demand for the products of industry is no longer there.

Thus Keynesian remedies of unemployment naturally concentrated on measures to keep the level of effective demand sufficiently high so that the economic machine does not slacken the production of goods and services. This type of unemployment caused by economic fluctuations did arise in India during the depression of thirties which caused untold misery.

But with the growth of Keynesian remedies, it has been possible to mitigate cyclical unemployment. Similarly after the Second World War, when wartime industries were being closed there was a good deal of frictional unemployment caused by retrenchment.

These workers were to be absorbed in peace time industries. The process of rationalisation also causes displacement of labour. But more serious than cyclical unemployment or frictional unemployment in an underdeveloped economy like India is the prevalence of chronic under-employment or disguised unemployment in the rural sector and the existence of urban unemployment among the educated classes.

It would be worthwhile to emphasise here that unemployment in underdeveloped economies like India is not the result of deficiency of effective demand in the Keynesian sense, but a consequence of shortage of capital equipment or other complementary resources.

Social Security

Social sufferings such as poverty, unemployment and disease are the sound grounds for advocating the provisions of social security measures in India as national programme.  

Social security is a dynamic conception which is considered in all advanced countries of the world as an indispensable of the national programme with the development of the idea of the welfare state; it has been considered to be the most essential for the industrial workers, though it includes all sections of society.

Social security is that security which the society furnishes through appropriate organisation, against certain risks or contingencies to which its members are exposed. These risks are essentially contingencies, against which the individual cannot afford by his small means and by his ability or fore sight alone.

As the State stands for the general well-being of the people, it is the duty of the state to promote social security which may provide the citizens with benefits, designed to prevent or cure disease, to support him when he is not able to earn and to restore him the gainful activity.


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