Economists and others often make a distinction between the organised or
formal and the unorganised or informal sector. There is a debate over how to define
these sectors. According to one definition, the organised sector consists of all
units employing ten or more people throughout the year. These have to be
registered with the government to ensure that their employees get proper salaries
or wages, pension and other benefits.
The passage describes the organized sector, select a statement which describes the relationship between globalization and the organized sector.
Answer & explanation
Correct answer: option 1
More and more companies
are reducing the number of permanent employees and outsourcing their work
to smaller companies or even to homes. For multinational companies, this
outsourcing is done across the globe, with developing countries like India
providing cheap labour. Because small companies have to compete for orders
from the big companies, they keep wages low, and working conditions are often
poor. It is more difficult for trade unions to organise in smaller firms. Almost all
companies, even government ones, now practice some form of outsourcing and
contracting. But the trend is especially visible in the private sector.