On the issues with the 70 Hours Work Week – Making sense of the employment challenge

Source: The post on the issues with the 70 Hours Work Week has been created based on the article “Making sense of the employment challenge” published in “The Hindu” on 21st November 2023.

UPSC Syllabus Topic: GS Paper 3 Indian Economy – Indian Economy and issues relating to growth, development and employment.

News: The article discusses why the argument for longer working hours in India based on the comparison with Post-War economies such as Japan, Germany and South Korea is flawed. It also highlights strategies to achieve higher outputs without longer working hours.

A detailed article on the 70 Hours Work Week can be read here.

What are the flaws in the comparison of India’s situation to Japan and Germany?

The case of high working hours in Japan, Germany and East Asia post-World War II is not helpful in understanding the situation in India because it was a unique phenomenon.
This is due to the following factors:

1. High Demand for Labour due to the impact of World War II: A high demand for labour services in these countries was a crucial determinant of hours worked. After witnessing major destruction during World War II and experiencing a decline in their workforce due to war mortality, the demand for labour was abnormally high.
2. Need for Post-war Reconstruction: In the economic rise of the three countries mentioned, it was post-war reconstruction that provided the demand for greater output in the first instance. Longer workdays followed.
3. Role of External Aid: In the case of west Germany, there was the Marshall Plan by which the United States had assisted the country’s revival.
4. Role of Nationalism: A political aspect beyond finance is a strong nationalistic element. It must have enabled the voluntary supply of effort to rebuild the nation after a destruction by foreigners.
5. Role of a Dictatorial Government: Particularly in the case of South Korea, presence of a dictatorship enabled the commandeering of able-bodied men to work on large-scale development projects.

What are the economic strategies that India can follow to achieve greater output and employment?

1. Leveraging global demand: For this, Indian goods would have to be globally competitive.
   This can be achieved by working on the following:
   a. Productivity of its workforce, related to its health and skill.
   b. Physical infrastructure that complements labour.
2. Expanding the Domestic Market and Aggregate Demand: Producing food at a lower cost will lead to an increase in the real income of most Indian households (due to savings on food expenditure).
   They would now have more to spend on non-agricultural goods and services, leading to greater demand in the economy (which is needed to increase production in the rest of the economy). With this, output will also grow, and in turn employment.

Question for practice:

“Merely increasing the number of working hours in India based on the example of post-War Japan and Germany will not lead to desired outcomes.” Comment.