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Re: Social Conditions

Administrative Note:

Week's Agenda: Social Conditions

  Minimum Wage
  Rules regarding Safety of Personnel at work to be made clear
  Introduction of Social Security Net
  Introduction of identity card
  Removal of Age discrimination at work
  Creating conditions so that reservations will no longer be necessary

Here is my little contribution to this week's topic.

Minimum wage - Prof. Deepak Lal has written a monograph on this for the
Institute of Economic Affairs, London, in 1995. In it he reviewed
minimum wage laws and concluded that this was no way to help the poor.
(The Liberty Institute plans to reprint the monograph for Indian
Let me point out that in India, in addition to minimum wage laws, we
have a whole gamut of laws allegedly protecting the labour force. The
result is that although we have abundance of labour, most of it is
underemployed or unemployed. While those fortunate enough to find a
place in the organised sector (about 10-12% of the workforce) have
successfully cornered most of the benefits. The Economic Survey of India
shows that while the number of jobs in the organised sector had grown
marginally over the past few decade, the wage bill had increased almost
three times faster than the inflation rate. Consequently, we have
successfully pushed the over whelming no. of our workforce in to
permanent penury. So I think we should take the categorical stand that
minimum wage and all such laws be abolished.

Rules regarding Safety of Personnel at work to be made clear - If we
have a rapidly growing economy, and as a result almost full employment,
then the labour will have a lot of option before them. They will be much
more mobile than today. And in order to retain the best of the workers,
the employers will necessarily have to make the work environment safer.
Otherwise, the labour will simply move away. In contrast, what we have
today is that labour has very little option, there is an army of people
willing to accept any job, and not surprisingly, the employers have
little incentive to try and improve the work environment.

Introduction of Social Security Net - This should be the responsibility
of the individual concerned. And if there is demand for such services,
and there is the freedom, then there is no doubt that entrepreneurs will
develop financial products to meet that need. The assumption that people
are too ignorant and don't / can't think about their own future is too

Introduction of identity card - I am increasingly of the view that this
kind of ID system legitimises the big brother role of govt. And in the
past, these have been used to carry out genocide, i.e., by Hitler, in
Rwanda, Yugoslavia in recent times. Finally, it doesn't serve any
meaningful purpose. Taking this a little further, one can argue even
this business of Census. To me this collection of alleged data only
reinforces the rational of govt. planning. As for the result of all that
planning there is hardly any thing I need to add.

Removal of Age discrimination at work - If govt. is not in business,
then we can safely leave it to the private employer to decide whether to
have a specific retirement age for his employees or to continue with the
employee as long as he or she is productively engaged quite irrespective
of age. Discrimination on grounds of age or sex is a luxury most
employers in a competitive economy will not be able to afford. 

Creating conditions so that reservations will no longer be necessary -
Some of the most conducive conditions are economic growth, urbanization,
mobility. Demand for reservations is a reflection of the sense of
prevailing insecurity. With the employment situation as it exist in
India today, it is not at all surprising. Urbanization and mobility are
two of the most successful weapons against social barriers. And we in
India have doggedly tried to go against this trend by glorifying and
romanticising our village life, and policies such as distribution of
land, etc, have all contributed to this. it would be very interesting to
compare India's rate of urbanization with that of other countries. We
seem to have completely forgotten that the word civilisation comes from


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