Employment aspects of FDI in retail trade.

The argument that FDI in multi-brand retail will lead to the creation of  10 million of jobs is fallacious and misleading. It is true that a few thousands of literate/educated youth will get job in retail chains and get attractive salary too. Most of those jobs will be generated at the front-end, in positions such as sales associates, cashiers, customer services staff, security guards, in-store security personnel, IT and systems for retail staff, customer relationship associates, loaders/ unloaders, merchandise refilling staff, department managers, store managers and regional and national managers. Some of the new jobs will be in warehousing and logistics-related areas. The rest will come in manufacturing services such as pre-processing and processing. But what is the guarantee that the displaced persons belonging to the unorganised retail sector will find employment in the multinational retail outlets. A few corporate brokers will also get opportunity to earn considerable amount of brokerage. Coming to reality, the creation of  millions of jobs is unachievable even in the long-run, leave alone in just three years. Various studies on the impact of global retail giants setting up retail stores confirm that job losses have occurred everywhere and as a result disrupted the livelihood of the people. The study by David Neumark of the University of California and his colleagues in 2007 revealed that for every job created by Big Box retail, 1.4 jobs are lost from smaller retail stores in the neighbourhood. Other studies have found that the entry of Wal-Mart into a county reduces both average and aggregate earnings of retail workers and reduces the share of retail workers with health coverage on the job. The impact is not only one of substitution of higher wage for lower wage retail jobs, but also a reduction in wages among competitors. As a result of lower compensation, Wal-Mart workers make greater use of public health and welfare programs compared to retail  workers as a whole, transferring costs to taxpayers. Another study on opening of retail shops by the global giants in Jakarta (the capital city of Indonesia, found that 2 jobs were lost in the unorganised retail sector for every one job created by the Big Box retail). For argument sake, if four or five big global retail giants decide to open stores and each one of them set up 10 shops on the average in each of the 53 million plus cities, on the whole 530 shops will be opened by them over a period of time. If each of the retail shop employ on the average about 200 persons directly, the 530 shops put together will employ only 0.53 million persons; equal number of persons might be employed indirectly.

Moreover, the employment situation in the country is quite annoying. Recent data provided by National Sample Survey Office (NSSO) on employment and unemployment conditions in India disclosed that during the five year period between 2004 and 2009 only 2 million jobs were created in the country, even as and 2012. Moreover, the record of employment generation during the economy witnessed   an average annual growth rate of 8.43 percent. This is in stark contrast to the Planning Commission’s target of creating 58 million jobs in the five years between 20072004-2009 (2.0 million) that was   far below that recorded during 1999-2004 (60 million). NSSO data also show that employment rate has actually declined in the five year period ended 2009-10 to 39.2 per cent from 42 per cent in 2004-05. If the growth of population is taken into account, there has actually been a decline in employment in absolute terms. When NSSO data are   compared with that of Census of India projections, it appears that during 2004-2009 only 2 million jobs were added against the addition of 55 million persons to the workforce (aged between 15-59 years).⁶ NSSO data also indicate an increase in the number of casual workers by 21.9 million during 2004-05 and 2009-10. But the growth in  the number of regular workers halved during this period compared with the previous five year period. This means that there has been  a substantial shift in the structure of labour force in the Indian economy during the period in question. Actually, the retail trade sector has acted as a cushion to many of those who could not find employment opportunities and for those who were displaced from their jobs for various reasons.  Therefore, opening up of the retail trade sector to multinational retail giants will pierce the cushion thereby leading to increase in crime and violence.