Are Strikes Bad for Business? Not in TN That Tops in Number of Factories and Strikes: Report

New Delhi: Are strikes bad for business and investment? Not really, says a report in The Hindu, which found that in Tamil Nadu (which saw a massive strike in the Samsung India plant near Chennai recently) if the number of strikes were grew, so did the number of new factories.

Collating data from the Labour Bureau, the report found that, “In 2008-18, Tamil Nadu (an industrialised state) recorded over 26% of all the strikes called, the highest among all states by a wide margin. At the same time, the state also hosted 16% of India’s factories and a similar share of factory workers during the period, again leading other states by a wide margin.”

The study in The Hindu found that the top three states that saw the highest number of strikes during this period were Tamil Nadu, Maharashtra and Gujarat. It noted that in terms of production loss, Gujarat was the highest at 24%, with the second-highest number of strikes, while Tamil Nadu recorded the highest number of total man-days lost at 15%. Notably, these three states are also the most industrialised in the country in terms of the number of factories located and the number of workers hired.

Read Also: TN: Samsung Strike Completes One Month Amid Rising State Repression

The three states also lead in the Gross Fixed Capital Formation of factories (a measure of net investment in fixed assets, such as machinery) said the report, adding that Labour Bureau data suggests that “in most industrialised states, workers strikes are fairly common, with the number of factories continuing to remain high and even growing.”

“This contradicts the argument that strikes are harmful to business,” the report added.

The report said the in India, the trade union density rate (union members/total workers, was 20%, “which is not even among the top 50 economies”. In fact, among the BRICS countries, India is on the fifth place, with half of trade union density than that of China, which tops at 44.2%.

“Iceland (91.4%), followed by advanced Scandinavian economies (Denmark 67%, Sweden 65.2%, Finland 58.2%, Norway 5.4%) lead the world in this measure with over half of their workers unionised,” said the report.

The report comes in the backdrop of a 50-day strike in Samsung India’s plant near Chennai recently, led by the Centre of Indian Trade Unions, demanding among other things, recognition of their union. The Korean electronic major’s India arm claimed in the Madras High Court that it had suffered losses of around $100 million due to the strike. The strike was eventually called off on October 15, with the workers claiming “victory”.