India Under Employed

You don’t have to walk around India very long to see unemployed people. They will beg from you on the street, tapping on the car window as you wait in traffic. (Although I’ve been told that many of those people are actually “employed” by someone who assigns them a corner to work, takes the money they collect and pays them a share. That’s another story.)

Today’s story is about all of the under employed people of India. People who work every day at a job that consumes their time 6 days a week, provides an income for their family but uses little of their talents and contributes little to the overall real wealth of India.

I took this picture from the balcony of the 7^th floor service apartment where we are living until we can move into our regular apartment. There is a man at this post 24 hours a day. His function is to open the gate for vehicles coming from the bottom of the picture (the drive in front of our building) and to direct vehicles coming from the upper right to use the drive behind the building (upper left). These vehicles would have come from the other side of the apartment complex, possible having just entered from airport road where they were screened for entry by another guard. He is also available to answer questions and give directions to new residents such as myself—at least if I could pose them in Telugu. Telugu is the most widely spoken south Indian language although Kannada is the official language of Karnataka, the state in which Bengaluru (aka Bangalore) is located.

Other under employed Indians who have provided service to me include a lady whose job is to stand at the entrance of the parking garage, push the button on the parking ticket machine and hand the ticket to the driver. Innumerable people whose function is to open doors or simple stand by an open door and greet you as you come in.

It probably includes some of the six people needed to complete my purchase of a digital camera but I can’t really say because I don’t understand the process. The first person explained the cameras which were available, their features and prices, much as the salesperson in an American store. After we had selected a camera he led me upstairs and invited me to have a seat in front of a large desk.

There were four people behind the desk, one of them facing to the side and working on a computer. The salesman handed the camera to one of the men behind the desk. This man asked how I would be paying, I told him with a credit card. I offered the card which he looked at but did not take. He wrote the camera description and price on a sales receipt, with 2 or 3 carbon copies, handed it and the camera to a second man. This man took my credit card and conferred in some language other than English with the man at the computer. I assume the man at the computer obtained authorization for the charge from VISA.

The man holding everything then gave my camera back to the salesman and the paperwork which I think now included a contribution from the computer’s printer to the fourth man behind the counter. He made an entry into a book, initialed each copy of the sales receipt, filed papers in two different folders and handed three copies of the sales receipt to the salesman.

At this point we repeated the process because in the meantime Donna had found a coffee maker and a hair dryer to purchase. We then followed the two salesmen who had our purchases and paperwork to the door of the store. They presented the goods and receipts to a man seated outside the store. He examined the goods and receipts, stamped each copy and handed it all back to the salesmen, who delivered to us our purchases with one copy of the sales receipt.

India with 1.1 billion people has a gross domestic product of $3800 per capita (purchasing power parity, $800 nominally). For the US’s 300 million people the number is $40,000 per capita. Is this the result of under employment—or the cause? I think both. Unemployment in India depends a lot on who’s counting but is probably 2-3 times that of the US., meaning people can be found to take any job offered. We hear a lot about cheap labor in developing countries but this labor can only compete in the world economy when it is coupled with serious capital investment.

Some Indian companies are gaining the ability to obtain that capital, but for the most part it requires 1^st world-based multinational companies. Two percent of India’s GDP is exported (2004 number) and that is generated by a small fraction of the highest paid, most capitalized, most productive workers. So most of India’s labor force serves and is funded by domestic consumption. There is little incentive to be more productive because labor is cheap and capital is expensive.

The human potential here is tremendous, the slow expensive process of building the capital base to support it (both infrastructure and specific industries) is underway. This is a country of great promise for it’s own people and for the world.