What are the negative impacts of Globalization on Employment?

The negative impacts of Globalization on Employment are:

  1. 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.
  2. 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
  3. 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.
  4. 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.
  5. 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.
  6. 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 in danger.
  7. 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.

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