GS- III >> Economy >> Employment
Context: Recently, Infosys founder N.R. Narayana Murthy suggested that young Indians should work 70 hours a week to boost the country’s development.
Debate sparked by Narayana Murthy’s views:
- It delves into the concepts of worker productivity and labor productivity, the complexities of measuring productivity, and the relationship between worker productivity and economic growth.
Worker Productivity v/s Labour Productivity:
- Worker productivity, which differs from labour productivity only in the types of work involved, measures the output value per unit of labour time at a micro level.
- At the macro level, it’s evaluated through the labour-output ratio or changes in Net Domestic Product (NDP) per worker in each sector.
- However, in some services, especially those requiring intellectual labour, measuring output independently is challenging, so workers’ income often acts as proxies for productivity.
- Increasing working hours to enhance productivity implies that the additional work and output value produced don’t receive commensurate pay, which may benefit profits but adversely affect workers.
- Complexities of measuring productivity:
- Measuring productivity, especially in services involving intellectual labor, can be challenging.
- In such cases, workers’ income is often used as a proxy for productivity.
- Murthy’s assertion that increasing working hours enhances productivity can be flawed.
- Link between worker productivity and economic growth:
- The connection between worker productivity and economic growth is intricate.
- While enhanced productivity influences economic growth, it may not necessarily lead to improved prosperity for workers.
- Income disparities and skewed income distribution within India are highlighted.
Current working hours status in India:
- Current working hours of young Indians: According to data from the Time Use Survey conducted in India in 2019, young Indians aged 15-29 presently work an average of 7.2 hours a day in rural areas and 5 hours a day in urban areas.
- High working hours in Uttarakhand: In the context of urban areas, a state-wise comparison reveals that Uttarakhand leads the way, with its young population working an average of 9.6 hours a day.
Comparing India with Japan and Germany:
- Link between work productivity and longer hours:
- Murthy asserts that India’s low work productivity necessitates longer working hours to compete with countries like Germany and Japan.
- This is due to stark differences in labour force, technological development, and sociopolitical structures.
- After World War II, both these nations temporarily increased their average annual working hours to 2,200-2,400 hours (8.3 to 9 hours per day), but later, as labour productivity improved.
- They reduced working hours to about 1,400-1,600 hours (5.3 to 6 hours per day) by 2020.
- Comparing work hours and labor productivity:
- India, on the other hand, maintained annual working hours above 2,000 but experienced only a marginal increase in labor productivity, from $2 per hour to $9 in the same period.
- Implications of longer work hours:
- Longer work hours mean less time for sports and leisure activities.
- When compared to Germany and Japan, Indians allocate less time to sports and leisure.
- They spend more time on sleep and household chores.
Challenges in India:
- Income distribution disparities and productivity gains:
- Income inequality within India is explored, showcasing how the top income groups have disproportionately benefited from economic growth compared to the lower-income segments.
- It indicates that a considerable portion of society’s gains have disproportionately benefitted the top income groups, rather than the workers.
- Factors like labour laws and informal employment contribute to this phenomenon.
- The link between worker productivity and economic growth is intricate.
- While increased productivity contributes to economic growth, its impact on workers’ prosperity is less certain.
- Worker productivity and labor conditions:
- The rise in informal employment and the exploitation of workers in sectors like manufacturing and IT are linked to India’s low wages.
- Despite high labour productivity, low wages persist due to profit motives.
- Challenges in comparing labor productivity:
- Considering that 89% of the Indian workforce is engaged in informal employment, while Germany has only 4.2% and Japan around 8% in informal employment, challenges arise in comparing these nations’ labor differences in the nature of their labor force.
- Balancing work and life:
- Enhance productivity through technology adoption and technical education.
- Focus on output and invest in the right tools and resources.
- Promote growth and a promising future to motivate the youth.
- Prioritize self-care, including exercise, hobbies, quality sleep, and spending time with loved ones.
- Government schemes to enhance productivity:
- Skill development initiatives such as Skill India.
- Digital India.
- Make in India.
- Startup India.
- Ease of Doing Business reforms.
- National Industrial Corridor Development.
- Incentives for research and innovation.
- Tax reforms like the Goods and Services Tax (GST).