A new study of apparel makers finds that companies in states with pro-worker laws tend to use labourers less and machinery more to save costs
Critics have accused the recently passed labour laws, namely the Industrial Relations Code, 2020, of favouring employers. The code, among other things, makes it easier for smaller firms to lay off workers. But what if labour laws favoured workers instead? A study of apparel makers shows firms in states with pro-worker labour laws prefer using machinery and automation over hiring labourers.
Rana Hasan of the Asian Development Bank and his co-authors arrive at these results by comparing labour laws across states, and using data on around 1,800 Indian garment makers from 2009-10 to 2013-14. The garment industry was chosen because it employs labour heavily and so, any impact of labour laws is felt most strongly there.
Source: livemint
