No 'working poor' in plantations but misuse of income mostly on alcohol

Sri Lanka's 'Working Poor - which generally means workers who can't make ends meet - was the subject of an interesting discussion in Colombo last preceded by the presentation of two research studies by Prof Sunil Chandrasiri, Dean, Faculty of Graduate Studies, University of Colombo and Dr (Ms) Ramani Gunatilaka, International Labour Organization (ILO) Consultant on these issues.

Plantation workers

The discussion organised by ILO Colombo saw participants from diverse fields representing various sectors and two among them at least were not in full agreement with some definitions on matters like how these studies have dealt with or rather construing the computation of cost of living and minimum wage etc in the classification as 'Working Poor'.

One of the areas discussed was the estate sector. Dan Seevaratnam, Director/CEO, Watawala Plantations PLC revealed that a plantation worker's daily wage now is Rs 405 and a person working for 25 days per month would earn more than Rs 10,000 per month and if two people in a family working could earn more than Rs 20,000 it is a sufficient amount to run a family as their housing, children's education are free and also they would not incur anything on transport, unlike other workers.

Therefore, he said that the 'income' issues in the plantations is not due to workers being able to earn enough, but because on average they are spending between 40 to 60 % of their earned wages on alcohol and because its of a poor quality (kassipu) this leads to health issues, resulting in poor productivity. He said that the other interesting situation in the plantation sector is that even the women workers are prone to alcoholism almost in the same proportion as male workers. Therefore, in no way the plantation workers could be categorized within the 'Working Poor' and to the classification of persons earning less than two dollars per day - the accepted poverty line.

Wasantha Samarasinghe, President, Inter-company Employees Union, said that there is a huge disparity between the minimum wages of the private sector and the private sector. He said that the minimum wage of a public sector employee is Rs 11,730 plus Cost of Living added average Rs 5250 would work out to nearly Rs 18,000 whereas a private sector employee's minimum wage would be Rs 5,750 plus budgetary relief allowance Rs 1,000 added, working out to a just Rs 6,750. He said that in proportion to the cost of living figures calculated which now stands at 212.2 one should have an income of Rs 39,186 to meet the expenditure.

Discussing the research papers, Steven Kapsos, Economic and Labour Market Analysis Department, ILO Geneva said that Prof Chandrasiri's paper contained a detailed sectoral picture of relationship between growth, employment and productivity and this analysis contained sufficient details. With regard to Dr Gunatilaka's Research Paper, Mr Kapsos said that it contained details of national estimates of working poor and investigated determinants of working poverty and wages and the implications for policy.

He said that 'Working Poor' is defined as "employed persons living in households in which per-capita consumption is below the poverty line" and international estimates are based on ILO key indicators of the Labour Market and Global Employment Trends reports. He said that policy relevance at the national level is missing and in the case of global and regional estimates the country level trends and information about different groups within societies are missing.

In discussing her research study, Dr Gunatilaka said that her paper sets out to build a profile of Sri Lanka's working poor in terms of stock and characteristics, attributes associated with probability of being working poor and the reasons why the employed poor earn little to overcome poverty.

In her paper she has indicated that according to the national poverty line, 13.7 % or a million employed Sri Lankans were poor in 2006/7. The working poverty figure for the $ 1.25 and $ 2.00 per individual, per day poverty (daily wage) line were 5.4 and 28.0 %, respectively, suggesting a high degree of vulnerability just above the lower poverty line.

Dr Gunatilaka said that agriculture is the main repository of working poverty, with 43 % of all working poor and 54 % of females working in the sector. Manufacturing accounts for only 15 % while sub sectors in the services sector apart form health and social work 15 % and construction 9 % are less associated with working poverty than either agriculture or manufacturing.

Prof Chandrasiri's research paper examined the employment effect of growth in manufacturing sector industries in Sri Lanka covering a period of 17 years from 1990. It dealt with the slow growth period of the 1990s and the period of high growth of post 2000. The total labour force in Sri Lanka has grown from 6 million in 1990 to 8 million in 2008 indicating an annual growth of only 2 % per annum. Of this labour force, about 5.5 million were employed in 1990 and it increased up to 7.5 million in 2008. The rate of unemployment and under-employment was around 5.2 and 3.7 % respectively in 2008.

His paper indicated that with the introduction of liberalized policy reforms in the late 1970s, the manufacturing sector entered a rapid growth phase and maintained an average of 6 % growth per annum as against 4.8 % growth at national level.

It indicated that since the late 1980s manufacturing growth surpassed that of other sectors and this has been attributed to several contributory factors such as the free availability of imported inputs and capital goods, flow of foreign direct investment, export oriented policy support and emphasis on productivity.