Women’s Struggles in the Global Economic System: From Welfare to Wage Labor

The global economy has rewritten the rules of work over the past four decades, and women have often borne the steepest costs of that rewrite. What began as a promise of greater participation in the workforce has frequently translated into long hours, low pay, and almost no safety net. To understand why so many women find themselves stuck in precarious jobs despite higher labour force participation, we need to trace the journey from welfare-oriented states to today’s deregulated, capital-driven global economy.

From welfare state to economic reforms
Why this mattered for women
Deregulation and the rise of job insecurity
The disappearing safety net
Capital mobility and the new geography of risk
Layoffs and the orders-driven workplace
The feminization of labour
Where women end up
Wage gaps that refuse to close
The double burden in a global economy
Why this framework matters

From welfare state to economic reforms

In the decades after independence, many developing economies, including India, leaned on a welfare state model. The government was the primary employer in key sectors, public spending on health, education, and food subsidies was generous, and labour laws offered some protection against arbitrary dismissal. Women who entered formal employment often did so in public sector jobs that came with maternity benefits, pensions, and a degree of dignity.

That model began to crack in the 1980s and broke open in 1991. Facing a severe balance of payments crisis, India accepted a structural adjustment loan from the World Bank and the International Monetary Fund. The 1991 reforms, often called LPG (Liberalisation, Privatisation, Globalisation), were partly undertaken under pressure from these institutions, which required sweeping economic changes in exchange for loans. The new policy package included a 19 percent devaluation of the rupee, sharp fiscal consolidation, industrial deregulation, and trade liberalisation.

Why this mattered for women

Structural adjustment was never gender-neutral. Cuts to public spending hit the very services that allowed women to participate in paid work, such as subsidised healthcare, childcare-adjacent schemes, and food security programmes. When the state shrinks, the unpaid care burden does not disappear; it falls back onto women in households. Studies by research institutions like NCAER have reviewed how restructuring on the recommendation of the World Bank and IMF affected women’s employment patterns in India, noting that women face specific constraints when competing with men in a deregulated labour market.

Privatisation also reduced the share of secure public sector jobs, which had historically been more accessible to educated women. As industries were opened to private and foreign competition, employers began hunting for cheaper, more “flexible” workers, and women became the preferred hire precisely because they could be paid less and laid off easily.

Deregulation and the rise of job insecurity

Deregulation is often described in neutral language as “labour market flexibility.” In practice, it means contracts replace permanent jobs, social security shrinks, and the line between formal and informal work blurs. The ILO reports that the informal economy in India still accounts for more than 80 per cent of non-agricultural employment, and informality has a clear gender bias, with women significantly more likely than men to be working as informal workers even within the formal sector.

This shift creates a particular trap for women. They are pulled into paid work, but the work itself offers little stability. A woman packing garments on a contract basis for an export factory may be hired during peak orders and dismissed the moment demand dips. A domestic worker in an apartment complex has no written contract, no provident fund, and no recourse if her employer suddenly decides she is no longer needed.

The disappearing safety net

The welfare state at least promised, on paper, that workers had some protection. Under the reform model, that protection has been steadily diluted. Women in the informal sector face low wages, long hours, hazardous conditions, and exclusion from social security benefits, while the absence of formal contracts exposes them to arbitrary dismissal and underpayment. Laws like the Unorganised Workers’ Social Security Act of 2008 exist, but enforcement is weak and awareness is patchy, leaving millions of women effectively outside the protective umbrella the state once claimed to provide.

Capital mobility and the new geography of risk

One of the defining features of the post-1991 global economy is the speed at which capital moves across borders. A multinational can shift production from China to Vietnam to Bangladesh in search of cheaper labour, and an investor can pull money out of an emerging market within minutes. This capital mobility has redefined what job security means for women workers.

When global brands chase the lowest production costs, factories in host countries respond by cutting wages, lengthening shifts, and resisting unionisation. Research on manufacturing in developing countries shows that feminisation is strongest, and women’s share of employment is highest, in places where labour was organisationally weak and excluded from political power. In other words, mobile capital actively seeks out the workforce least able to push back, and that workforce is often female.

Layoffs and the orders-driven workplace

The export-oriented industries that absorb large numbers of women, such as garments, electronics assembly, leather, and seafood processing, are deeply sensitive to global demand. A recession in Europe or new tariffs in the United States can trigger waves of layoffs in factories thousands of kilometres away. Because women are concentrated in these volatile segments, they experience the boom-and-bust cycle of global capitalism more sharply than men.

Employers also engineer turnover deliberately. In feminised industries, “synthetic turnovers” through systematic discrimination against older or married women help maintain a revolving door of low-wage female labour. This is not an accidental side effect of globalisation but a feature of how the system is organised.

The feminization of labour

Feminization of labour refers to two related trends: more women entering paid work, and the conditions of work themselves becoming “feminised”, meaning insecure, low-paid, and lightly regulated. The term was popularised by economist Guy Standing in the late 1980s to describe how flexible labour markets pulled women in while pushing wages and protections down for everyone.

The pattern is visible across the Global South. Researchers have argued that growing labour market flexibility and income insecurity have pushed more women into the labour force, a process linked to structural adjustment and trade liberalisation. Women are not entering the workforce because the economy has become friendlier to them. They are entering because household incomes are squeezed, public services have shrunk, and survival demands a second earner.

Where women end up

Globalisation has channelled women into specific segments of the economy. Export processing zones rely heavily on young women for assembly work. Global value chains in textiles and electronics stretch from rural homes to international retailers, with much of the labour done by women paid by the piece. In agriculture, as men migrate to cities or abroad, women take on more of the farm work, often without legal rights to the land they cultivate.

Current estimates place India’s rate of female participation in the formal labour force at only around 24 percent, among the lowest in developing nations, with the majority of Indian women working in the informal sector in jobs with limited social protections and low wages. The paradox is striking: an economy growing at over six percent a year still cannot offer most of its women workers a secure job.

Wage gaps that refuse to close

Even where women find paid work, they earn substantially less than men for comparable tasks. An ILO research paper notes that in India, social norms attribute the primary responsibility for securing household income to men, while women are expected to devote their time to domestic care, which reinforces wage gaps and informal work patterns. This unequal starting point becomes self-perpetuating. Lower wages mean less bargaining power, less bargaining power means worse contracts, and worse contracts mean lower wages.

The double burden in a global economy

One feature of the welfare-to-wage-labour shift that is often underplayed is the double burden. As women take on paid work in factories, fields, and call centres, they continue to perform the bulk of unpaid care work at home. The state, having stepped back from providing affordable childcare and elder care, leaves this gap to be filled privately. For middle-class women, this often means hiring other women, usually domestic workers from poorer households, at low wages. For poorer women, it means a longer working day with no respite.

This arrangement allows the global economy to extract maximum labour from women while paying for only a fraction of it. The unpaid hours of cooking, cleaning, and caregiving are, in effect, a subsidy that households provide to employers and to the state.

Why this framework matters

Looking at women’s predicament through a global macro-economic lens shifts the conversation away from individual choices and toward structural conditions. A woman in a Tirupur garment factory is not simply unlucky; she is working inside a system designed to keep her labour cheap and her position weak. A domestic worker in Bengaluru is not just informally employed by accident; she is part of an economy that has systematically reduced the state’s role in providing protection.

Understanding this framework also opens space for policy responses that go beyond individual empowerment. Strengthening labour laws, extending social security to informal workers, investing in public care infrastructure, and regulating global value chains are all interventions that target the structure, not just the symptoms. Without such structural responses, the cycle of welfare retreat, capital mobility, and feminised precarity will keep reproducing itself.

What do you think? Has the shift from welfare to wage labour genuinely expanded opportunities for women, or has it simply transferred risk from the state to individual women and their families? If you were designing a labour policy for the next decade, which protection would you prioritise first, and why?

References

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Women’s Struggles in the Global Economic System: From Welfare to Wage Labor

Table of Contents

From welfare state to economic reforms 🔗

Why this mattered for women 🔗

Deregulation and the rise of job insecurity 🔗

The disappearing safety net 🔗

Capital mobility and the new geography of risk 🔗

Layoffs and the orders-driven workplace 🔗

The feminization of labour 🔗

Where women end up 🔗

Wage gaps that refuse to close 🔗

The double burden in a global economy 🔗

Why this framework matters 🔗