India Has a Wages Problem, Not a Jobs Problem

Aspirations have changed for Indians, and they are demanding formal, living wage jobs, says Manish Sabharwal of TeamLease Services, India’s largest staffing firm. Mr. Sabharwal spoke at the Nand and Jeet Khemka Distinguished Speaker Forum in November 2017.
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Leslye Smith

transcript

Aspirations have shifted from food to cell phone, bank account and a two-wheeler.

The debate you hear about jobs is actually a more nuanced debate between minimum wages and living wages. You know, people have raised their aspirations, and so everybody has minimum wages, or at least enough to live, and they’re saying, “Well, that’s not good enough anymore.” And so, if anybody has to respond to this kind of public furor for jobs, they have to recognize that people are not saying they want informal jobs, where 100 percent of job creation in the last 20 years happened. They’re saying, “We want a formal job, we want a paycheck, we want an employment contract, and we want 15,000 rupees a month.”

Now, how do you get productivity? Some regulatory fatwa can’t get you productivity, right? It’s really productive enterprises, which means access to credit, which means access to training, human capital – cities are more productive than villages. So it’s really the five labor market transitions: farm to non-farm, rural to urban, self-employment to wage employment, informal enterprises to formal enterprises, and school to work.

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