Why is it in the news?
- Infosys founder, R. Narayana Murthy, recently made a significant statement. He encouraged young Indians to emulate the post-World War II work ethics of Japan and Germany by putting in 70-hour workweeks.
- He believes that India’s worker productivity is notably low and that such a commitment could be the antidote.
Differentiating Worker and Labour Productivity:
- At its core, the concept of ‘productivity’ might seem straightforward, but it’s essential to distinguish between ‘worker’ and ‘labour’ productivity.
- While ‘worker’ productivity pertains primarily to cognitive tasks, ‘labour’ productivity leans more towards physical ones.
- The general metric to measure productivity is the value of output per unit of time spent on the task.
- However, there’s an interesting nuance when it comes to intellectual labour. Since the direct output of intellectual tasks can be challenging to measure, often, a worker’s income is used as an indicative measure of their productivity.
The Essence of True Productivity:
- True productivity stems more from skill and expertise rather than merely the time invested. Elements like education, health, and specialized training can significantly bolster one’s ability to produce quality output in less time.
- This notion debunks the myth that decreasing work hours can hinder output value. In reality, with the right skills, fewer work hours can still be incredibly productive while ensuring workers maintain a good quality of life.
Dissecting the Productivity-Economic Growth Link:
- The relationship between individual worker productivity and overarching economic growth isn’t linear. For instance, while India’s GDP saw a commendable rise from 1980 to 2015, this growth didn’t equitably benefit all.
- Studies by economists Lucas Chancel and Thomas Piketty unveiled that the top earners in India saw their incomes skyrocket during this period. However, this surge wasn’t necessarily a reflection of their productivity. Instead, factors like inherited wealth and managerial control over remunerations played pivotal roles.
Addressing Misconceptions about India’s Productivity:
- It’s a common yet flawed notion to equate India’s worker productivity with its average wage.
- Contrary to Mr. Murthy’s statement, multiple sources, including international firms like Kronos Incorporated, have noted that Indians rank among the hardest workers globally. However, despite their dedication, they also unfortunately rank low in terms of average global wages.
The Complication of Informal Labour:
- India’s vast informal labour sector throws another wrench into the productivity analysis. With the rise of informal employment, even in sectors that are traditionally considered ‘formal’, measuring true productivity becomes a challenge.
- Furthermore, the prevalence of Micro-Small-Medium Enterprises (MSME) further muddies the water, especially as many larger corporations outsource tasks to these smaller units.
Revisiting the Japan and Germany Comparison:
- Murthy’s comparison of India with Japan and Germany may seem compelling at first glance, but upon deeper reflection, it’s clear that the countries differ vastly in terms of labour force composition, technological adoption, and socio-cultural dynamics.
- India’s unique challenges and strengths necessitate tailored approaches rather than directly imitating other nations.
- India’s path to sustainable growth lies not in merely increasing work hours but in understanding the nuances of productivity.
- It’s about making strategic social investments, tapping into the vast domestic consumption potential, and adopting a holistic, human-centric view of development.