Precariats in India: Globalization and Changing Employment Relations - Article Example

International Political Economy Precariats in India: Globalization and Changing Employment Relations “Precariats in India: Globalization and ChangingEmployment Relations” is an article written by Shalu Nigam (Centre for Women Development Studies, New Delhi) and published by Social Science Research network (SSRN) on October 30, 2014. In this article, the author discusses the issues related to the Precariats or contract workers in India, especially after the introduction of globalization, privatization and labour reforms. The author believes that the rights of the workers, especially that of the contract workers were sacrificed or neglected in the recently declared labour law reforms by the prime minister of India. The author argues that the present prime minister is also following the same footsteps of his predecessors who neglected the rights of workers since the country became independent in 1947. As per the views of the author, the present contract workers in India are much more skilled and efficient that the contract workers or Precariats in the past. In her opinion, even social security measures are denied to the Precariats in India at present (Nigam, 2014) This article develops based on Noam Chomsky’s theory related to Plutonomy and Precariat. According to Chomsky, Plutonomy refers to the luxurious life style of wealthy group of one percent of people in the world who have access to all the resources and are immune to any economic transition. The rest, vast majority of population is living in precarious conditions, therefore are called as Precariats”. The core of this theory is that workers should be kept insecure as much as possible in order to help the one percent population to maintain aristocracy and immunity in the society (Nigam, 2014). The central argument of this article is that contractual workers in India are exploited heavily by the business people. Nigam’s explanation about the pathetic conditions of Indian contract workers based on Plutonomy and Precariat theory is partially right. Even though India is one of the most rapidly developing economies in the world, the benefit of development is still invisible in the rural areas. In other words, signs of development are still visible only in urban areas of India where the elite class resides. The income inequality or the income gap between rich and poor in India are still increasing even though the country is developing. According to a UN-ESCAP report, the gap between the poor and the rich is growing in the Asia-Pacific region which includes countries such as India, China and Indonesia (Poor-rich gap growing in India, Asia-Pacific: UNESCAP, 2014). From the above report, it is evident that the poor or the working class in India are not getting the benefits of globalization or liberalization whereas the elite class in India is getting more benefit out of it. The elite class or the business owners in India do not like the idea of raising the living standards of the Precariats. They know that the Precariats will ask for more wages and benefits once they acquire the courage to do so. India is currently labelled as one of the cheapest labour oriented countries in the world. As a result of that even foreign companies are currently shifting their manufacturing units to India in order to increase their competitive power in global market. The elites and the administration in India do not like to change the image of India as a cheap labour oriented country. The combined efforts of the administration and the business groups in India prevent Precariats from getting a decent salary or living condition. That is why Nigam argued that the benefits of globalization in India are limited only to the business people or the elite class. At the same time, it is illogical to argue that the Precariats in India got nothing out of globalization or governmental policies. It should be noted that many of the Precariats in India are able to go out of their mother states and seek employment in overseas countries or in others states of India that offer better remuneration. For example, a lot of north Indian Precariats are currently working in India’s southernmost state Kerala. According to a study conducted by Kerala government, the number of north Indian workers in the state is more than 25 lakh at the moment. Even though the migrant Precariats in Kerala were employed in unskilled professions such as construction earlier, the scenario has changed a lot in the recent past. Many of the Precariats in Kerala are able to work in skilled professions at the moment (Philip, 2014). Some of the arguments of the author in this article seem to be contrasting. For example, the general argument of the author is that Precariats are exploited by the employers in India at present. At the same time she has mentioned Singur and Nandigram struggles against Tata’s Nano, agitation of workers in Jhargram in Midnapore, in West Bengal against Jindal Group, POSCO struggle in Odisha, Anti SEZ movements in Goa, Andhra Pradesh, Tamil Nadu, Haryana, Punjab, Gujarat and Karnataka in order to make an argument that the awareness about exploitation is growing among Precariats. It should be noted that Tata, one of the biggest companies in India forced to shift its manufacturing unit from West Bengal to Gujarat because of the agitations from Precariats. If Tata is unable to counter the resistance of Precariats, there is no point in arguing that Precariats in India are still unable to fight against injustices. The income gap among the rich and poor are widening not because of the denial of benefit to the Precariats but because of the better abilities of the elites in exploiting the opportunities provided by globalization. Rich in India are well equipped or more equipped to exploit the opportunities than the Precariats. In other words, the percentage of benefits received by the elites in India from globalization is more than that received by the Precariats. That is why the income gap among the rich and poor in India is still increasing. The major reason for the migration of Precariats to Kerala is the better wages and working conditions. In Kerala, the daily wage for a contract worker is around 650 rupees whereas that in North it is still below 100 rupees. Many of the migrant Precariats in Kerala considers Kerala as their paradise since they were able to enjoy better job benefits and working conditions there. It should not be forgotten that globalization helped them a lot in migrating to states like Kerala and overseas countries. From the above discussion, it is evident that the living conditions of the ‘Precariats’ in India are getting better all the time even though the income gap is still widening. Therefore, Nigam’s arguments about the living standards of Indian ‘Precariats’ are partially right and partially wrong. At the same time some of the other concepts developed by Nigam about the exploitation of Precariats’ in India seem to be a 100% reality. For example, she has mentioned that Precariats’ in India are often engaged in hazardous occupations they are often unorganized. Moreover, they engage with a particular organization for a short period, therefore hardly are in position to join or form unions (Nigam, 2014). Regular workers in India have trade union rights and hence it is possible for them to fight against any injustices with the help of trade unions. For example, public sector bank employees have recently conducted a successful strike against the government for wage revision (PTI, 2014). At the same time, it is impossible for the contract workers in India to think about protesting against the injustices of their employers since they are unorganized. No trade unions in India are ready to help Precariats’. In fact no trade unions in India made any effort to unionize the unskilled or contract labour segment. As a result of that, Precariats’ can do only one thing- leave the job- once they get dissatisfied by their duties. Another concept raised by Nigam is that the Raja-Praja rule (King-people rule) which is still evident in India’s unskilled labour sector. For example, autocratic management styles are prevailing in India’s construction sectors where contract workers are more. It is impossible for the contract workers to question any of the instructions of the employer. At the same time, it is possible for them to leave the job if they feel that the orders of the employer or the treatment they receive from the employer are wrong. Since there are no labour contracts in between the employer and the contract workers, it is possible for the employer to fire the contract worker any time they want. It is possible for them even to deny the pending salaries. Even though Nigam has raised many arguments and concepts in this article, most of her arguments are not supported by adequate data. In other words, lack of evidence is a major problem associated with the arguments in this article. She has made many generalizations without bothering too much about supporting those generalizations with data. She has relied heavily on secondary sources for substantiating her arguments. She has not conducted any interviews, surveys or observations to collect primary data. She could have justified her arguments, had she conducted some interviews with the Precariats’ or a survey among the Precariats’. It should be noted that the working climate in India is changing day by day because of globalization and liberalization. Therefore, current data is necessary to back up an argument related to the working conditions of workers in India. Only primary research is capable of providing current data. However, Nigam has not conducted any primary research in order to get more awareness about the present situations of the Precariats in India. Another drawback of this article is that the author failed to gather information from wider literature. Precariats or contract workers are everywhere in the world and their working conditions are entirely different from that of regular workers. It would have been better had Nigam compared the working conditions of Indian Precariats with Precariats in some other countries. It should be noted that India is a democratic country and still Precariats facing a lot of problems there. Under such circumstances, the conditions of Precariats in an autocratic country like Saudi Arabia could be worse. Nigam could have made a comparison between the working conditions of Indian Precariats with Saudi Precariats or Precariats in any other country so that her arguments could have been strengthened. The writing style of Nigam appears to be excellent. The article starts with an abstract in which the author mentions her intentions and the major points discussed in the article. After that, the author has provided a brief introduction in which she explains the background of her study. The body of the article starts with a theoretical framework related to rich and poor. Noam Chomsky’s theory related to Plutonomy and Precariat has been used in this article in order to support the arguments. The body of the paper has been arranged under different subheadings. At the same time, the author failed to provide a clear conclusion in this article. The author should have concluded all her arguments under the heading “conclusion”. Moreover, the author could have added another heading like “recommendations to improve the working conditions of Precariat”. There is no point in conducting a research and conclude nothing or recommend nothing. In that sense, it is logical to argue that Nigam’s effort to empower the public related to the pathetic working conditions of Precariat in India has not been fully succeeded. To conclude, the author has made a brave effort to bring the pathetic working and living conditions of Precariats in India. The author is able to present many arguments in relation to the exploitation of Precariats in India. However, she failed to support many of her arguments with the help of primary data. Over reliance on secondary sources has decreased the quality of this article. At the same time, the author did succeed in revealing the fact that the benefits of globalization has not been reached the poor or working class as it do to the elites. Governing global finance and banking The article, “Governing global finance and banking” is written by Randall Germain (Department of Political Science, Carleton University, Ottawa, ON, Canada) and published online on 16 Oct 2012. Before publishing online, this article was appeared in the Review of International Political Economy Journal dated 4 October 2012. This article is about governing global finance and banking. The aim or objective of this article is to analyse global political economy, especially after the recent global recession. It analyses the impact of recent recession upon global financial systems and international financial institutions. The author claims that this article will analyse not only the ‘known knowns’ and the ‘known unknowns’ of global finance, but also some ‘unknown unknowns’ such as the macro, meso and micro dimensions of financial governance and banking regulation (Germain, 2012) The theory used in this article is neoliberalism. According to this theory, extensive economic liberalization, free trade, and reductions in government spending in service sector are necessary to stimulate economic growth in a country (WHO, 2015). The economic theories related to Neo-liberalism became extremely popular in America and other western countries in the last 25 years. The establishment of financial institutions such as International Monetary Fund (IMF), the World Bank and the Inter-American Development Bank clearly underlines the importance of neo-liberalism in the present economic circles. The central argument of Germain is that neoliberal economic principles are the root causes of the recent recession. “At the macro level, and within the core economies of the global financial system, the ethos of political economy at work within global finance and banking remains robustly neoliberal in character. We might term this one of the ‘known knowns’ of global finance” (Germain, 2012, p.531). He has pointed that proper regulations were in place in the banking industry before the arrival of the neoliberal principles. It is a fact that global financial systems and banking industries faced several problems because of the recent recession. Many of the American and European banks were failed to overcome the recession problems. On the other hand, banks in Asian countries such as India and China were able to overcome the recession problems. Germain argues that the reason for the above scenario is the increased involvement of the state in banking activities in Asian countries and the decreased involvement of the states in banking activities in western countries. It should be noted that the central banks (Reserve Bank of India in the case of India) in Asian countries were able to regulate the operations of the banking sector properly. As a result of that, banks in Asian countries did not get the freedom for crazy lending habits. Asian banks provided loans to the people only after assessing the repayment abilities of the loan seekers. On the other hand, banks in western countries were liberal while dealing with loan applications. They sanctioned loans to virtually everyone who approached them, without bothering too much about the repayment abilities of the loan seekers. In other words, banks in western countries got more freedom while lending because of the neo-liberal economic principles prevailing there. Crazy lending habits have brought financial problems in western banking industry as many of the borrowers failed to repay the loans in time. In short, the reasons cited by Germain for the collapse of financial institutions in western countries seem to be logical and acceptable. “What we do know about the organization and exercise of power in global finance is that size matters” (Germain, 2012, p.532). The above argument seems to be applicable only in western countries. However, in Asian countries, this rule may not be applicable since all the financial institutions in these countries need to work in accordance with the governmental laws. For example, in India, it is impossible even for private banks to operate independently. It is necessary for all the banks in India, private or public, to operate strictly in accordance with the guidelines of Reserve Bank of India. Even while fixing the interest rates, banks in India cannot cross certain limits. On the other hand banks in western countries have ample freedom in their operations. That is why the financial crisis has affected the western countries more and Asian countries less. Another interesting argument of this article is that “even though private sector lobbying paid off in terms of bringing the concerns of ‘big finance’ to the table, the actual follow through failed to conform to their dictates” (Germain, 2012, p.533). In other words, the author believes that private sector cannot affect the financial policy making beyond certain limits. Traditional belief is such that the governments in western countries are vulnerable to the pressure exerted by the private institutions while making economic policies. Since majority of the western countries are capitalist countries, the above belief is justified somewhat. However, the author of this article believes that the traditional belief about lobbying capabilities of private organizations is not true always. The concepts developed by the author in this paper are not defined clearly. Moreover, many of the terms used in this paper are also not defined properly. For example, the author makes use of neoliberalism as a theory to substantiate many of his arguments in this paper. However, he failed to define neoliberalism clearly in this paper. It should be noted that ordinary people may not have much ideas about terms like neoliberalism. The author should have given the definition of it in order to help ordinary people to understand his arguments clearly. The major limitation of this article is the lack of primary data. The author tried to overcome the limitations related to primary data with the help of secondary data. However, it is impossible to replace primary data with secondary data since both are different in terms of objectivity and relevance. It should be noted that primary research gives descriptive data as well as current data whereas secondary research gives data from the past. Comparison of present and past data is necessary while dealing with a topic in finance. The author could have conducted some interviews with any of the officials in the banking sector to gather primary data. The author has used many references in this paper to support his arguments. However, most of the secondary sources used in this paper give only qualitative data. In fact lack of quantitative data is a major problem with the article. While dealing with topics such as finance, it is illogical to leave out quantitative data. For example, the author should have provided the financial performances of some of the banks that were collapsed in America or Europe during recession period. The readers could have compared these data with the past data of the same banks in order to know the depth of the problems created by the recent recession. In short, the methodology used for writing this paper seems to be improper. Moreover, evidences provided for supporting the arguments of this paper appear to be weak. The author should have provided the financial statements of the collapsed banks before the recession period in order to know whether the banks were performing strongly at that time or not. The language used in this paper is extremely complicated. Randall Germain is Professor of Political Science at Carleton University, Canada. In other words, Germain has ample knowledge in international political economy and global finance. As a result of that, he prepared this paper in a highly complex language. Only the graduates or post graduates in economics can understand many of the terms and arguments presented in this paper. It is difficult for an ordinary person to understand the arguments of the author because of the complex language used. There is no point in writing an article if it is difficult to digest to ordinary people. The author failed to realize the fact that majority of the people in this world have less knowledge about financial terms and economics. Although economics is not a new subject, international political economy is a new topic. Even though the concepts of international political economy were originated in the 70s and 80s, it became a part of academic discipline only in recent times. As a result of that, many of the people in this world, especially the older generation have little knowledge about it. Under such circumstances, the author should have used simple terms and languages to explain his argument so that even a layman could have benefited from this article. The presentation of the article could have been improved further. An abstract or executive summary should have been given at the beginning of the paper in order to make the readers aware of what this article is intended to do. An abstract at the beginning would have helped the readers to know the major arguments first and then decide whether to read the article or not. The introduction of this paper is not so good. Instead of starting from background information, the author has went straight into the topic at the beginning itself. The author could have given some general information about the recent recession first and then go straight into the topic. The purpose and aim of this paper should have been mentioned clearly at the end of the introduction. Moreover, the author should have defined key terms in the introduction itself. The style of the paper could have been improved further with the help of a conclusion at the end of the paper. Instead of concluding the arguments and major points, the author tried to make a prediction about global finance and international political economy at the end of this paper. Even though there is nothing wrong in doing so, the absence of a conclusion section definitely visible in this paper. Moreover, the author should have provided some recommendations in order to avoid the collapse of banking institutions in future. Instead of doing that, the author tried to explain some areas in which more research is needed. After conducting a comprehensive study like this, it is logical to provide some recommendations to avoid the problem discussed in the paper in future. At the same time, the author did succeed in preparing this paper on a wider canvass. He was able to compare the political economy of Asia with that of America and Europe in this paper. This comparison is extremely useful since Asia did succeed in surviving the recession problems while America and Europe struggled to do so. At the same time, he could have conducted a case study of any of the banks in an Asian country in order to know what strategies helped that bank to overcome the recession problems. To conclude, the author of this article is successful in identifying the root causes of recent recession. He has pointed out that excessive belief in neo-liberal economic principles has caused the collapse of banks and other financial institutions in the western world. On the other hand Asian countries had less faith in neoliberalism and they were hesitant in implementing neo-liberal economic principles. As a result of that banking and financial institutions in Asian countries were able to resist the challenges caused by recent recession. The author could have used some primary data to back up his arguments. Moreover, he could have used simple language while writing this article. It is difficult for ordinary people to understand the arguments of the author clearly since the terms and language used for this paper is extremely complicated. In short, this article is useful for those who have sound knowledge in economics and international political economy. It is not so good for ordinary people who have less knowledge in economics and international political economy. References Germain, R. 2012. Governing global finance and banking, Review of International Political Economy, 19:4, 530-535 Nigam, S. 2014. Precariats in India: Globalization and Changing Employment Relations. [Online] Available at: http://ssrn.com/abstract=2516162 [Accessed 1 February 2015] Poor-rich gap growing in India, Asia-Pacific: UNESCAP. 2014. The Economic Times. Oct 3, 2014. Philip, S. 2014. Migrant workers find their places in Kerala. The Indian Express. March 19, 2014 PTI, 2014. Public sector banks employees to hold strike on Wednesday. [Online] Available at: http://businesstoday.intoday.in/story/sbi-public-sector-banks-employees-strike/1/212181.html [Accessed 1 February 2015] WHO, 2015. Neo-Liberal Ideas. [Online] Available at: http://www.who.int/trade/glossary/story067/en/ [Accessed 1 February 2015] Read More