Labor supply in early industrialization : the case of the Bombay textile industry

World Bank Reprint Series: Number Seventy-nine Dipak Mazumdar Labor Supply in Early Industrialization: The Case of the Bombay Textile Industry ReFrinted from The Econtmiiic History RCView, Second Series, vol. XXVI, no. 3 (August 1973), pp. 477-96  Labour Supply in Early Indlustrialization: the Case of the Bombay Textile Industry BY D. MAZUMNIDAR T HE Bombay textile indum,trv was one of the earliest cxaniples of the estab- lishment ofmodern factories in an ncedrclervelo pecl" agriculttural cot i try, and it rapidly became a major employer of lhiouir in the regioin conicerned. At the same time, as we shall see, the industry evolved an extremely or-iginial, and possibly unique, system of labour utilization, to accommodate itself to the p)(clcl- liar supply conditions of migrant labour from the rural sector. Section i of this paper sets out what has appeared to students of this stubject to be the crux of the problems of labour supply to the Bombay textile industry. In SectioIn ii I shall briefly reviewv wh-t I understand to be the various soluitions to this p)rol)len proposed so far, including that by Prof. M\orris David M t)rris in a recenty P1th1- lished book.' I will turn to a more positive anialysis of this systeni, and the ligh,t it throws on the natture of the labour supply to this market, in Sect ion iII, andl I hope this analysis will provide a satisfactory solition to the apparent paradox of the labour market.2 The Bombay textile incl listry, which started witlh its first mnill in I856, was estab- lished in an urban area with a sizeable population. In i86.1. whiile the city's population was about 8I 7,000, the total enmjloyzmnit in the cottonli Imiills was nO(t much more than 6,ooo. However, the rate of expanision of cmnplovnwu1ft in the industry was dramatic, through the latter part of the nhieteenthi century, .tiid by i9o6 the iiidtistry was employing over ioo,ooo workcrr-rather more thall io per cent of the total population of the city.3 In spite of the rapid i;icrease in the demand for factory workers in textiles, there seems to have been a pcrmintnent surfeit of labotur. The evi(dlence of labour officers and comnmittees for even verv early years ofthe iiiclustry suLggested that there was iever any problein of\ecu . inl adegq tate nuiimbers of wvorke rs as raw r-ecrui its to the flictories. Prof. Mlorris l1ia3 rc- ferred to thle unmistakable cEvidenice on this poinlt in the documenirilts of the period.4 IMorris David Niorrki, The Eiiiereince of an Thduslrial Labour Force in Inidia lletkelcv and J.0.s .\o 1r 1965). 2 Mt y work on this subject wa s originally clone for my doctoral dissertation ! Fai t,.-% iT n W.ge Dispat itie. between Agriculturc and Industry in a Devet. -uing Econorny' unlmblllish?d Ph.I). dissertation, Cant1- bridge University. i 58W. A largely tlttoreti'al article based on the Bornbay evidence was published: 'Underemployment in Agriculture and the Industrial Wage-rate', 1Eiaornmira (Novemlber, 5959). The material has now been brought up to date and will form part of a larger work on labour in under- developed countries to be published in the near future. 3 Figures on population are to be found in the Census Reports. F-nplnynierit figii ies in the cottoni mill industrv are presented in Morris, op. cit. Appendix xI. 4 Ibid. Chapter 3, Section 3. 477  478 D. MIAZUMDAR WNIhen thei e was a period of temporary shortage of labour it was generally caused by natural disasters, e.g. the outbre a of l)ubonic plague in 1897. And periods of rapid expansion of textile eniployizei t, suich as that which took place in the tiventy years p)reecdling i891, tI l agaiin tlhe 40 per cenIt increase that occurred betwTee 1914 and Io22, did niot put any iipwvard pre(sLSre on real wages. There is one other piece of eidednce alb.out the sufieit of labour in tllc market, which Prof. Morris does not menitioin, but which would secll to be conclusive. I'his is the peculiar sy stenm of labouir utilization in the textile induzst ry, known as the badli system. Tlle badlis were literally substitutC labotur. In effect, tlley con- stituted a casuial w%i-ng of the lal)our force labour that was employed on a day- to-dI"Ivl)asis muclha.sinithiedocks allongsidle aplermanailenit"core'' of workerspaid onl atIiommtlly basis. Everyinmorningitile 'stmlhstitutest" gaitlherie-dinifrontofthemill gates and were hand-picked by the jobbers responsible for the recruitmeint of labour. There was no guarantee that a "substitute" appearing at the mill gate would get a day's workl. In fact, there was idence of considerable iuinderemploy- mernt arnong suc.h workers. Tlhus the supply of potential recruits to industry was well in excess of the demanil oIn an average day; awl the fact that this system of labour utilization becarme a p)crilzleIlnt featiure of tlhe indiustry sulggests that the state of excess supply of labouir vaS a iormal one. Ve have no historical ex idlen ice as to wlen this systni of sub1stitulte labillur came into existence, but there can be no doubt that it existe(d over most of the. life of the industry. An official witness cleatrly referred to the system in hiis written evi- dence to the Royal Cornirnissim oIn Labour for I892. He wrote: "In the whole matter of Bomlbay factory labour three blenmishes strike me: [ a) the delay of wage pa%mnients (b) the evil housing of workers (c) the floating residuiiii of mill hiands. For the floating residuum of miill hands wlhich the Seniio Inspector of Boilers put at the startling total of 25,000, no remedy seems apparent."' The statement incdicates that by i89-2 the floatiilg reserve of "substitutes" had come to be an important part of the labour market scene: the pool was more than a third of the average full-time employmen:, (which was then some 65,ooo). There was reference to the system in the evidence presented to the factory com- miission of I9o8.2 and extensive dlisemissions about substitute labour in the evidence given to the Tariff Board Enquiry inito the textile industry in I927.3 In spite of the general evidence of abundant labour :und the specific evidence oftlhe badlisys teni pointing to ain excess suppl)y of labour at the going wvage;there IIrC also irnportant indicationls tilat the Bombay textile induistry) experienccd a scarcity rather thain surfcit of labour. Pirof. Monris hias re lerred to the voluine of commllenits on the la)bour suppl)y) sittiatioii before the First World WVar as "chao- tic"1,4 complaints al)out "';erit.l)bly a labour ramine" existing side by side with testirrmonies abLout the adeq(uiate Stml)l)l- of lab1our1 . The Indian Factory Labour 1 Letter from the Collector of Land Revenue, Custonms and Opiumn, Bomibay, to the Chief Secretary to the Cov%ernmen , Ro)al Commission on Labour (Parl. Papers, 1892, xmxvi), p. I29. 2 Indian Factory Labour Commission, (P.P. i 908, Lxxiv), Part n, p. 76. a Rtpori of the Indian Tariff Board CntoLnn Textile Industry Enquiry, Bombay, 1927), See partic'llarly the oral evidence of the mill owners in ridcme, nit, 298. 4 Morris, op. cit. p. 59.  BOMBAY LABOUR 479 Commission of i 908 stated categorically in its Report: "The position of the opera- tive has been greatly strengthened by the fact that the supply of factory labomi is, and has been, inadequate; and there is, and lhas been, the present cDIp'--ition among employers to secure a full labour supply."1 The conv entional view anmong students of Indian economic history on the lablouL supplv qLestion6 was formed by a frequently quoted passage from the Report of the Royal Cfommission on Labouir, I93I: Throughout the greater part of its history, organized industry has expcpeiercedl a shortage of labour. Towards the end of the nineteenth century, after the plague epidemics the difficulties of employers were acute, especially in Bombay-speak inlg generally, it would be true to say that the turning point came during the last five years. Up to that stage, labour tended to havc the upper hand in that there was competition for its services; since then the tendency has been for workers to com- pete forjobs.2 Turning to the level of wages in Bombay factories, evidence is available from a very early date that it was higher than in comparable occupations. Thlls in I892 the Collector of Customs informed the Royal Commission on Laboulr of I892, in response to the criticism of the Chief Inspector of Fl.ctories al1OLlt the constancy of factory wages: "The point whiclh Mr. Moos seenms to me to Illiss is that though factory wages have not risen they have continuied greatiN in exss of the wages the worker seems to have been earning or can earnii in ally other employment."3 Sixteen years later, the Indian Factory Commission coiifih mned this statement: "The wages of operatives in textile factories vary from place to place, but are everywhere considerably higher than those earnied by the same class of men in other employments."4 Perhaps the best indication of the level of wages in the industry is to compare it with the wage rates in the rural areas from whichl a large proportion of the indus- trial workers came. The available data are studied from this point of view and presented in the Appendix. It would appear that for much of the period before the First World War the wage level in Bombav factories was nearly I50 per cent above the rate for rural field labour in the most significant catchment area for the mill workers. It is true that the cost of living was certainly higher in Bombay than in the rural areas, so that the wage differential in real terms was less. But the difference in the cost of living could not have been anything like the extenit of the wage gap. A study by the author for the year T954-5, when reasonablyl firm data were available, showed that the budget of a typical agricultuiral wv%lorker cost 45 per cent more in the city while the budget of an urban induistrial worker cost 32 per centless in the country.5Another point to rememberin this collniexion is that whereas a full-time worker in the Bombay factories w%could secuire r'cgu1latr' and continuous work, employment for rtiral field labour would be intermittent.0 1 India Factory Labour Commissiotn (P.P. 1 908, Lxxiv), Part IT, p. 543. 2