People's Voice - December 1-15, 2008

Lakhs of workers are losing their jobs in both China and India in the wake of the global crisis, even while their economies grow faster than the rest of the world. Both have followed the policy of globalization through privatization and liberalization during the last few decades. China started on this path nearly 15 years before India. Its economy is more integrated with the world economy. The impact on China is therefore more severe. The impact on India is also serious, despite government claims to the contrary. The more the Indian economy integrates with the capitalist world economy, more will job insecurity rise.

The Prime Minister and Finance Minister continue to claim that the financial crisis will not affect India very seriously. This is despite the fact that nearly 10 lakh people have already lost jobs since the beginning of this year. Many more are under threat, as most economists believe that the year 2009 will be worse than 2008.

Both jobs and conditions of work are under severe attack. Here are a few facts that show how widespread and hurting is the impact on working people:

1.	At least 7 lakh jobs have been lost in the textile & clothing sector due to decline in production since April this year; and 5 lakh more could be laid off in the coming months. Mills are running only 3-4 days a week. Some have reduced the number of shifts. The textile and clothing sector in the country provides employment to 3.5 crore people.
2.	Essar Steel, Ispat Steel and Jindal Steel have slashed production by 20%- 30% in the last two months.
3.	Force Motors, Kirloskar Oil Engines, Bharat Forge, ThyssenKrupp Industries, Kirloskar Brothers (Dewas Plant) are running their plants only five-days-a-week. As most workers get paid only on the basis of the number of days they work, their monthly income has got reduced by 15-30%.
4.	Car and truck makers like Maruti, Suzuki, Mahindra & Mahindra and Tata Motors have started cutting production by 15%-20%. This has led to loss of jobs and incomes not only in their own plants but also in the factories supplying components. Most workers in auto component industry are contract workers. A sizeable part of wage incomes in car and truck making factories is linked to the workers’ productivity; as production goes down, workers’ incomes also go down.
5.	Temporary workers are the first ones to lose their jobs. Tata Motors asked 3000 temporary workers not to report for work. Bharat Forge has removed all trainee and probationary technicians. Essar Steel Alogma has offered voluntary retirement to 200 employees. GE Money, the consumer finance company of GE, has decided to shut down around 50% of its 170 branches in India in the next few months and retrench all the people working there.
6.	Working hours are being increased in IT companies to maintain their profit. TCS, Wipro and Infosys have increased working time to 9-9.5 hours per day. One hour extra per day means 22 hrs additional work per month; every hour of work earns the company $20 at no extra cost; so the company earns additional $440 or Rs 22,000 per employee per month.
7.	An INDIA TODAY-MaFoi Survey, carried out across 1000 companies covering 22 sectors, assessed the future employment plans of these companies. It found that barring health and education, virtually every sector is cutting down on new recruitment. In 2008, the surveyed companies recruited 9,48,563 people. Prior to the financial crisis in October, the forecast for 2009 was an additional 9,75,313 employees recruitment by these companies. After the financial crisis, these companies have cut their new employment requirements by over 30 per cent to 6,67,490. The survey identified real estate, retail, IT, automobiles, hospitality and textiles as the worst affected sectors.
8.	For every job lost in the organized sector, three to four jobs will be lost in the unorganised sector as small-scale suppliers lose orders from the big companies.

The Chinese government continues to boast that it remains the fastest growing country of the world, despite the global slowdown. However, the situation of the working class and toiling majority is deteriorating seriously.

The Chinese economy is highly dependent on exports, particularly to the United States and to Europe. Exports have sharply fallen due to the deep recession in the US and Europe. Thousands of factories in China have cut production or completely closed down. Huge number of workers have lost their jobs. Monthly income of working families has fallen and they have been forced to cut down their spending even on essentials.

The worst affected are the special economic zones of China where a large number of factories for export are located. In southern Guangdong, 7000 factories have been shut down. Lakhs of workers, who had left their farms to work in these export factories in the hope of a better life, have been forced to return to their villages, where there are no jobs.