Alibaba co-founder Jack Ma has come in for a lot of flak with his 9-9-6 statement—9 to 9 every day, six days a week—for employees in the tech industry in China. In a lengthy blog post, he was dismissive of those looking for a typical eight-hour day and said that, while he could have said something that was ‘correct’, ‘what we lack is truthful words that make people think’. And, in response to what Ma said, Richard Liu, who heads rival firm JD.com, said that he would never force people to work a 9-9-6 schedule since it was inhumane. And though Tesla founder Elon Musk hasn’t tweeted on it recently, he had said, last year, that he even worked 120-hour weeks; while he said that no one should put in so many hours, he recommended working 80 hours as a matter of course. And, in response to criticism such as from Ariana Huffington who said that after 17-19 hours without sleep, we have the cognitive impairment of someone who is legally drunk, Musk said that “there are way easier places to work, but nobody ever changed the world on 40 hours a week”.
The debate over whether a 40-hour week is ideal or whether it should be Jack Ma’s 72-hours will continue, and it is true that, as Huffington pointed out to Musk, that unstressed minds come up with innovative solutions—she gave the example of Franklin D Roosevelt coming up, on a 10-day break on a naval ship, with his $50bn lend-lease programme that helped him convince the Congress to give the UK the money it needed to carry on with the war; without this, World War II could have swung the other way. But, equally important, work hours need to be related to productivity. In other words, since workers in developing economies are typically not as productive as those in developed ones, they need to work longer—and at lower wages—to retain their competitive advantage; ditto for poorer developing countries like India versus richer ones like China.
In the case of India, for instance, apart from the issue of needing to allow hire-and-fire, a larger problem relates to the high minimum wages and the frequent upward revision in even this. And, if that isn’t bad enough, the government even puts a restriction on how much overtime workers can do; while the law restricts this to 17-18 hours a month, and never more than two hours at a stretch (!), overtime wages are generally double the normal ones.
Ensuring workers don’t get exploited is important, but when the option to this is no—or low levels of—employment, this needs to be re-examined. India’s wage rates are much lower than those in China—or even Vietnam—but the real way to examine this is to adjust them for productivity. You also need to factor in how much overtime is allowed—Bangladesh allows roughly double what India does per month—since that determines what effective labour costs are. The fact that exports from countries like Vietnam and Bangladesh are growing much faster than those from India is proof of India’s dysfunctional labour laws. A study by Radhicka Kapoor and PP Krishnapriya of Icrier found that, in even the small organised sector in India, the share of contract workers rose—from 15.5% in FY01 to 27.9% in FY16—with firms trying to restrict the crippling power of trade unions. While the NDA did little about labour reforms in the last five years—indeed, in its manifesto, the BJP takes pride in raising the minimum wage by 42%—if this is not addressed by the next government, India’s share of exports is going to further fall and the jobs situation is going to become even more alarming.