WORKER PRODUCTIVITY
1. Context
Citing Japan and Germany as examples of countries that grew because their citizens worked harder and for longer hours to rebuild their nations in the aftermath of the Second World War, Infosys founder N.R. Narayana Murthy sparked a debate recently, urging young Indians to work 70 hours per week. He further noted that India’s worker productivity is one of the lowest in the world.
2. About Worker Productivity
- The conceptual difference between worker productivity and labor productivity.
- It emphasizes that worker productivity encompasses mental activities, whereas labor productivity is associated with manual activities.
- The primary measure of productivity is the output value per unit of labor cost.
- In certain service sectors, particularly those involving intellectual labor, measuring output independently is challenging.
- In such cases, worker income is often used as a proxy for productivity, raising questions about the relationship between extended work hours and increased productivity.
3. Relationship Between Worker Productivity and Economic Growth
- The complex relationship between worker productivity and economic growth.
- While increased productivity may contribute to economic growth, it does not necessarily translate to improved prosperity for workers.
- Examining income distribution in India from 1980 to 2015, the article highlights the significant disparities between income groups.
- It shows that the increase in prosperity for the wealthiest is not always correlated with increased productivity.
- Factors like hereditary wealth transfers and arbitrary pay decisions may play a more substantial role.
4. Is India's Worker Productivity Among the Lowest in the World?
- The challenges the perception that India has low worker productivity, emphasizing that income is often used as a proxy for productivity.
- It points out that Indians are among the hardest-working employees globally.
- The presence of a significant informal labor pool in India complicates the calculation of worker productivity.
- The rise of informal employment, even in the formal sector, is associated with cost-cutting measures, affecting labor standards and working conditions.
5. Comparisons with Japan and Germany
- The relevance of comparing India's economy with that of Japan and Germany.
- It argues that the differences in labor force size, technological trajectories, socio-cultural aspects, and political structures make such comparisons invalid.
- The enhancing social investments and focusing on domestic consumption potential are key to achieving sustainable and desirable development outcomes.
6. Conclusion
The worker productivity, its relationship with economic growth, and the specific context of India. It emphasizes the need for a more nuanced understanding of these concepts and the importance of addressing income disparities and labor standards.
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For Prelims: Worker Productivity, Economic Growth, Second World War,
For Mains:
1. Discuss the role of worker productivity in the economic growth of a country. Is there a direct correlation between increased worker productivity and overall prosperity for the workforce? (250 Words)
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Previous Year Questions 1. With reference to the Indian economy after the 1991 economic liberalization, consider the following statements: (UPSC 2020)
1. Worker productivity (Rs. per worker at 2004-05 prices) increased in urban areas while it decreased in rural areas.
2. The percentage share of rural areas in the workforce steadily increased.
3. In rural areas, the growth in the non-farm economy increased.
4. The growth rate in rural employment decreased.
Which of the statements given above is/are correct? A. 1 and 2 only B. 3 and 4 only C. 3 only D. 1, 2 and 4 only Answer: B 2. Disguised unemployment generally means (UPSC 2013) A. large number of people remain unemployed
B. alternative employment is not available
C. marginal productivity of labour is zero
D. productivity of workers is low
Answer: C |
Source: The Hindu
