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Essay on “Cheap Labour is a Liability not an Asset” Complete Essay for Class 9, Class 10, Class 12 and Graduation and other classes.

Cheap Labour is a Liability not an Asset


So far, large sections of India’s elite, while viewing the poor and their “tendency to over-reproduce” with disgust and contempt, have done little to push for a serious population policy. In large part this has been because they have benefited from this unending supply of cheap labour. But this unending supply of cheap and largely unskilled labour has serious unrecorded economic consequences. It severely constricts demand-growth and limits Indian industry to producing low quality, low-valued added goods. In the global market, this eventually puts Indian industry at a great competitive disadvantage rather than advantage.

Modern-day production fetches larger profits when labour productivity is multiplied manifold. With some exceptions (like the Gulf oil industry), even in the extractive industries like mining, India’s cheap labour cannot always compete against advanced mechanized procedures. Industries that rely excessively on human labour are generally becoming unremunerative, and generate low rates of profit.

Higher rates of profit are to be found in those industries where the labour force must be well-educated and highly well-trained. Those Indians who wish to sell India’s cheap labour in the world market will find that the scope for selling commodities produced by cheap labour is ultimately quite limited. That will not turn India into the “Asian tiger” that they wish.

It is important to observe that years of high-growth in the ASEAN nations were also accompanied by rapidly falling birth rates, rapidly increasing literacy rates, and what is most significant —also rising wages. Virtually every ASEAN member has a literacy rate of over 85%, with much lower infant mortality rates and higher life-expectancy than India. Their work-force on the average is better trained, better paid, and more skilled than India’s. Without investing in the social sector it is futile to dream about India becoming like advanced products that can compete with the best in the nations like Korea and Taiwan that has helped these nations build an ASEAN “tiger”. It is their highly skilled work-force especially in world. India’s industrialists ought to know that a poorly-trained and demoralized work-force cannot be compensated for by simply importing tools and machinery. Even to use modern machinery effectively and to keep it in working order requires certain skills that do not come automatically.

Another dimension to the cheap work-force scenario is that the demand for labour-saving inputs and devices grows very slowly. This means that both in the industry and in the home, the switch to higher quality machines, and tools does not take place or takes place very slowly. If it is cheaper to hire labour than buy a labour-saving device—who will make the switch?

But since human endeavour can rarely match the precision and accuracy of well-designed, computer-controlled electronic machines—the quality of Indian goods remains uncompetitive in the world market, even as the internal market for capital goods and appliances stalls.

A cheap labour market also implies a restricted market for consumption. When workers are well-paid they are able to buy more goods produced by industry. This leads to increased demand fuelling new investment and new opportunities for industries to expand. But if wages are so low that people can just about eat and spend on nothing else – even the market for consumer goods stagnates or shrinks. This means that industry has to constantly contend with demand-recessions.

If Indian industry is to ever grow at double-digit rates, the entire Indian mindset will have to change from tolerating a growing but cheap and unskilled workforce into building the social infrastructure that will rapidly control population growth and spend the money on improving the all-round development of India’s workforce.

While it is imperative that India quickly address it’s growing population, a problem that threatens to grow dangerously out of   hand it must do so without the prejudices and lackadaisical attitudes of the past. The problem should be taken up not just by the social welfare ministry hilt by all government and non-mental agencies, as well as by progressive organizations govern and unions.


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