{"id":68755,"date":"2020-11-05T16:56:07","date_gmt":"2020-11-05T11:26:07","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=68755"},"modified":"2020-11-06T11:07:40","modified_gmt":"2020-11-06T05:37:40","slug":"indias-growing-income-crisis","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/indias-growing-income-crisis\/","title":{"rendered":"India&#8217;s Growing income crisis"},"content":{"rendered":"<p><strong>Context: <\/strong>India has an incomes crisis: incomes of people in the lower half of the pyramid are too low.<\/p>\n<p><strong>What are the solutions to this income crisis?<\/strong><\/p>\n<ul>\n<li><strong>The solutions economists propose are:<\/strong>\n<ul>\n<li><strong>Free up markets:<\/strong> <strong>Markets should be freed up<\/strong> for agricultural products so that farmers can get higher prices; and freed up for labour to attract investments as without adequate incomes, people cannot be a good market for businesses.<\/li>\n<li><strong>Improve productivity:<\/strong> <strong>Improvement of \u2018productivity\u2019 is key to economic progress.<\/strong>\n<ul>\n<li>Productivity is a ratio of an input in the denominator and an output in the numerator. The larger the output that is produced with a unit of input, the higher the productivity of the system.<\/li>\n<li><\/li>\n<\/ul>\n<\/li>\n<li><strong>Apply technology<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>These fundamentals of economics must be re-examined when applied to human work.<\/p>\n<ul>\n<li><strong>Strategies for improving labour productivity: <\/strong>\n<ul>\n<li>Labour productivity as a universal measure of the productivity of an economy: The number of people in the system (the country\/ the economy) is the denominator, and the gross domestic product the people produce is the numerator.\n<ul>\n<li>They can take the organisationally more difficult route of increasing the total output of the factory while maintaining the number of workers. This may <strong>require adding more machines and technology to increase the capacity of workers<\/strong> to increase total output.<\/li>\n<li><strong>Employers can enhance their workers\u2019 skills<\/strong> and create a culture of improvement in the factory, where workers and managers cooperate to improve the capability of their system, and squeeze more output from limited capital resources.<\/li>\n<li><strong>This is the strategy of \u2018total quality management\u2019<\/strong>, with which Japanese companies reduced their costs and improved the quality of their products.<\/li>\n<li>Japanese invested in their workers; and the workers were the companies\u2019 \u2018appreciating assets\u2019 as they grew their capabilities as well as contributed to the improvement of the total productivity of their enterprises.<\/li>\n<\/ul>\n<\/li>\n<li><strong>The lazy management strategy for improving productivity<\/strong> is to reduce the denominator, i.e. the number of workers. Hire them when times are good, and fire them when the company cannot compete any more.<\/li>\n<li>Governments of countries cannot apply the \u2018hire and fire\u2019 strategy to improve a nation\u2019s productivity that companies can.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>What are the steps to be taken?<\/strong><\/p>\n<ul>\n<li>Workers provide the economy with the products and services it needs. In return<strong>, society and the economy must create conditions whereby workers are treated with dignity<\/strong> and can earn adequate incomes.<\/li>\n<li><strong>The government must regulate contracts<\/strong> between those who engage people to do work for their enterprises, even in the gig economy.<\/li>\n<li><strong>An authority on industrial policy and international trade<\/strong>, advocates reforms that will induce firms to employ more numbers of less skilled workers is required.<\/li>\n<li><strong>The government should push innovation<\/strong> in more socially beneficial directions to increase rather than replace less skilled workers.<\/li>\n<\/ul>\n<p><strong>Way forward<\/strong><\/p>\n<ul>\n<li>The power balance must shift. Small enterprises and workers must combine into larger associations, in new forms, using technology, to tilt reforms towards their needs and their rights.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Context: India has an incomes crisis: incomes of people in the lower half of the pyramid are too low. What are the solutions to this income crisis? The solutions economists propose are: Free up markets: Markets should be freed up for agricultural products so that farmers can get higher prices; and freed up for labour&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/indias-growing-income-crisis\/\">Continue reading <span class=\"screen-reader-text\">India&#8217;s Growing income crisis<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1310],"tags":[],"class_list":["post-68755","post","type-post","status-publish","format-standard","hentry","category-daily-news-updates","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704939111},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/68755","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=68755"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/68755\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=68755"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=68755"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=68755"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}