70 hours Work: Narayana Murthy Suggests

Infosys founder N.R. Narayana Murthy’s recent call for young Indians to work 70 hours per week has ignited a debate on worker productivity in India.
He cited Japan and Germany as examples of nations that prospered due to longer working hours post-World War II.
However, his views raise questions about worker productivity, its relationship with economic growth, and India’s unique context.

Worker Productivity vs. Labour Productivity

Conceptual Difference: Worker productivity involves mental activities, while labour productivity is associated with manual tasks.
Measurement: Productivity is typically measured as the output value per unit of labor cost.
Complexity in Services: In intellectual labor, measuring output independently is challenging; hence, worker income often proxies productivity.
Fallacious Assumption: Murthy’s assertion that increased working hours lead to higher productivity is contentious, as it could exploit workers without commensurate pay.

Complex Relationship: While productivity improvements impact economic growth positively, the relationship is intricate.
Distribution of Income: India’s economic growth hasn’t necessarily benefited all income groups; wealth disparities persist.
Income Inequality: Income gains have disproportionately favored the top income strata, suggesting a disconnect between productivity and income distribution.
Factors Influencing Wealth: Factors like hereditary wealth transfers and arbitrary compensation for the super managerial class have contributed to income disparities.

Proxy Fallacy: Using income as a proxy for productivity can yield misleading conclusions.
Indian Workforce: Indians are among the hardest working employees globally, but they receive comparatively lower wages.
Contradictory Statements: Narayana Murthy’s claim about low productivity seems unsubstantiated, possibly driven by motives to push labor reforms.

In 1980, India’s Gross Domestic Product was about $200 billion, which by 2015 exceeded $2,000 billion.
Income distribution data from 1980 to 2015 in India:

1. Bottom 50% income groups experienced a 90% increase in income.
2. Top 10% income group’s share increased from 30% to 58%.
3. Top 0.01% experienced an increase of 1699%.
4. Top 0.001% had an increase of 2040%.

Rise in Informal Employment: Economic reforms have witnessed a surge in informal employment.
Limited Formalization: Formalization efforts have mostly focused on tax compliance and not labor standards or conditions.
Exploitation in MSMEs: Even within the formal manufacturing sector, Micro-Small-Medium Enterprises (MSMEs) engage in wage cutting to maximize profits.
Outsourcing Practices: Large corporations outsource production to smaller labour-intensive units, exacerbating labor exploitation.

Inadequate Comparisons: India’s unique context, including its labor force, technological trajectory, socio-cultural dynamics, and political structures, makes direct comparisons with Japan and Germany inapt.
Unique Development Path: India’s sustainable development requires enhancing social investments, tapping domestic consumption potential, and focusing on human-centric development.

The call for extended working hours to boost worker productivity raises complex issues regarding labor exploitation, income distribution, and India’s economic context.
Direct comparisons with Japan and Germany overlook India’s unique challenges and opportunities.
A comprehensive approach that addresses these intricacies is essential to ensure sustainable and equitable development in India.