F.Y.B.COM. SEMESTER II
FOUNDATION COURSE – II
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Q.2 What is the impact of globalisation on employment opportunities?
ANS:
The
effects of globalization on employment can be analysed based on the NSSO
(National Sample Survey organization) data. The employment (Current daily
status) growth accelerated between1999-2000 and 2004-05 as compared to the
previous period of 1993-94 to 1999-2000. During 1999-2000 to 2004-05, about 47
million work opportunities were created and as compared to 24 million during
the period 1993-94 to 1999-2000. Employment growth accelerated from 9.25 per
cent per annum during 1993-94 to 1999-2000 to 2.62 per cent per annum during
1999-2000 to 2004-05. However, a higher labour force growth of 2.84 per cent per
annum during 1999-2000 to 2004-05, which exceeded the growth in workforce of
2.62 per cent per annum, resulted in an increaseinunemploymentratefrom7.3percentin1999-2000to
8.3 per cent in 2004-05.
In
recent years, the quality of employment created has also been a matter of
concern as the organized sector employment has been declining. Moreover the
share of regular workforce in total employment was low. This decline is
attributed primarily to a decline in employment in PSUs. During 1999-2000 to
2004-05, most of the growth of 4.7 per cent per annum in industrial and tertiary
employment, was in the unorganized sector. There has been a clear shift in
workforce from organized sectors to the casual and informal sectors as
liberalization has caused informalization of labour.
At
present, the main challenges for the policymakers are to target a rapid growth
of employment creation and also improve the quality of employment generated by
strengthening the organized sector.
Negative Impact:
·
The organized sectors have become profit-driven and there is
a lot of emphasis on cost-cutting and have therefore gone in for downsizing
policy. Labour in unorganized sector is not protected, so they have no job
security, provident fund, medical facilities or paid leave and suffer due to
low wages. Globalization has caused a shift of labour from the organized to the
unorganized sector.
·
Even large firms like Bajaj Auto and Tata Steel have
succumbed to pressure and have chosen automation and computerization of
processes over securing jobs of their employees. Excess labour has been
retrenched by offering VRS (Voluntary Retirement Scheme) and CRS (Compulsory
Retirement Scheme). According to a report of National Commission on Labour
(2002) indirect compulsion, pressure tactics have been used to compel employees
to resign under VRS
·
With disinvestment of some public sector units, employment in
these sectors has reduced. The most affected sectors are manufacturing,
construction, electricity, gas and water supply.
·
The level of employment in the small scale sector has
remained stagnant and discouraging. FDI inflow in several sectors has wiped out
the business of many small and medium size enterprises forcing them into
closure.
·
MNCs have exported jobs from developed countries to
developing countries through foreign investments. Moreover they offer higher
pay than what is offered by employers of local enterprises adding to the
inequalities in income.
·
Through trade liberalization the government has actually
encouraged substitution of domestic goods by imports which has reduced the
market size for goods manufactured by domestic labour bringing down their wages
and putting their jobs indanger.
·
Trade unions have become weaker in negotiating better pay and
security for workers as only efficient labour is absorbed by the profit- driven
enterprises. To save workers from losing jobs, they were compelled to accept
cuts in salaries, freezing of dearness allowance and other benefits and
eventually reduction in labour force.
Positive Impact:
·
The employment in the services sector has increased from 20%
in 1991 to over 30% in 2010. The reason behind this is creation of new jobs in
the IT and communication sectors. Jobs in Call Centres, BPOs, and medical
transcription as well as other service sectors such as banking, insurance,
airlines have buoyed employment. Foreign companies from different sectors like
banking, and finance have come to India to outsource their work creating jobs
in accounting, mortgage collections, marketing etc.
·
Other sectors where job opportunities have multiplied are
Biotechnology; health care especially with chains of private hospitals being
set up; medical research centres; food retailing with shopping malls cropping
up at every nook and corner of the cities and towns.
·
In the field of education, there is a demand for trained
professionals as international schools and colleges are poised to enter India
on a wider scale.
·
MNCs generate employment for the skilled workforce especially
in urban areas. It motivates labour to pick up various skills through training.
·
There is an increase in contractual and casual employment due
to globalization since employers can’t afford to have a large workforce on a
regular basis. Female participation in workforce has actually improved.
Especially in the casual, informal sectors affording low wage or flexible
employment and export oriented low technology high labour industries such as
garments, electronics. etc., there has been an increase in women’s employment.
·
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