The Labour Conundrum

The condition of labourers in India is often used to drive home the image of the exploitative corporate. There is, of course, a modicum of truth to this generalisation. Private enterprise does respond only to profit, and therefore the condition of labour would not be their primary concern. However, what is also undeniable is the ability of private enterprise to stir growth in the economy and hence drive people out of poverty - either directly through employment or through increase in government tax revenue that can then be spent on provision of basic services. Therefore, the question becomes - under what conditions is private incentive incompatible with social good? This will guide us to the answer.

There are nuances, and we must be cognisant of these nuances before making policy recommendations. I am not an expert in this field, and therefore do not claim to have the definitive answer. However, there are a few observations I have that I believe might be useful to put out in the public domain. I worked with a lot of data while working on McKinsey's 'India's Path from Poverty to Empowerment' report. While this wasn't directly a part of my workstream, Chapter 2 of the report is a great summary of what might be wrong with India's economy, and does talk a lot about labour.

My opinion on this question of labour, however, was shaped by the time I spent at a factory in rural Gujarat. Every day over seven months, I interacted with a cross section of employees at this factory and understood the dynamic of unemployment. Two things were most clear - one, that both the contract labourers and the factory wanted to convert contract labourers into permanent employees; and secondly, labour laws designed to 'protect' labour were, in fact, doing them the most harm. Let me elucidate on both.

Contract labour markets are extremely chaotic and unreliable. To understand this, one should literally imagine a truck leaving the factory in the morning, stopping by in the nearby villages and picking up labourers to work at the factory for the next eight hours. The reality is somewhat more nuanced, but not drastically different. Workers are paid day-by-day, and therefore have no long-term contracts and basic employee protection. They can be barred from work at the whim of the corporate. There is bare minimum protection against accidents at work. That is the nature of such contract employment that is seem to be the most exploitative of employment opportunities. On the other end, corporates are not very happy with this set-up either. Something as trivial as a marriage in the village or rains can cause massive productivity losses in the factory. The worker cannot be trained to improve productivity, since there is no guarantee that he will turn up the next day. Factory owners would prefer to have a greater commitment from the worker but usually isn't able to receive it.

What is the villain in the story? The very same labour laws that were once meant to protect labour. The cost of employment for the factory owner increases dramatically at certain numbers. For example, above 100 employees, the cost of firing employees increases substantially and factories are therefore loathe to increase the number of (permanent) employees unless the benefits are high too. Therefore, Indian manufacturing displays the phenomenon of the 'missing middle' wherein workers are employed either in small - scale enterprises or really large ones; and there is a large number of workers who are in contract employment. For example, employees in large scale enterprises (greater than 200 employees) are 8 times as productive and earn 4.5 times as much as workers in small scale enterprises (less than 49 workers). The following exhibit from the McKinsey report is enlightening:

Labour laws can also easily become a way for corrupt bureaucrats to extract 'quasi - rents' from corporates. Transparent and secular labour laws can dramatically improve employment generation in a state. For example, the share of the organised sector in overall employment is 21 to 22 percent in 'labour-friendly' states such as Gujarat, Karnataka and Maharashtra, as compared to an all - India average of 14 percent. Organised sector workers get many of the benefits that one would believe that workers should have. Moreover, one can see that the relatively less 'pro-employer' states such as Bihar, Assam and West Bengal are also the laggards in economic growth.

In a country at India's stage of development, where there is massive disguised unemployment in agriculture that is waiting to be released, labour protection is extremely important. However, in trying to protect the labour that is already employed, we might fall prey to the typical 'insider-outsider bargaining problem,' where protecting the already employed might harm the interests of those who could be potentially employed. A thorough re-look at labour laws is required if India wants to pull its citizens out of poverty quicker.

Trinity Term, Year 1

My friend Mubashir is my mirror. Nobody has ever analysed my life and its decisions in such depth as this guy has, and nobody has pushed me to think about it so much either. I was forced to think what part of me is really intrinsic and what part of me is just me trying to create a different me. It has therefore been a truly fascinating term, one that was happy and reflective at the same time.

I try to imagine that back in December, had someone told me that by May I would enter one of the most pleasant phases of my life, I would have laughed. Deep scars had just be re-opened, and my confidence lay at an all-time low. It is when man falls in his own eyes that the light at the end of the tunnel seems like an illusion, a consolation to a broken soul. But, in impatience, if one tries to put the weight of mountains on feeble shoulders, those shoulders will crack. I now feel lucky to have found the ground under my feet, to have found the hand with a healing touch, and in the process found myself. I now know that there is always hope; and as long as one keeps the head high, one gets there. 

The entire year has been one of exploration, and that was the point of leaving an overbearing identity to come here and start from scratch again. To run, to fall, to try and get up, to limp, and finally to take flight - that was what I was excited about, and that is where I have finally come. I sit in my room, writing this post, with several empty bottles of wine and cans of red bull lying in front of me, a little pink flower in a soda bottle, A heap of washed clothes that need ironing. The shelves emptied of books resembling a battle field. A pressure cooker with dal and a vessel of pulao. This experience at Oxford has helped me explore bits of me that I didn't know existed.

One night, as I walked back with Mubashir, I took a stroll down memory lane to the Subhashish of Class VIII - the one who worked very hard, and yet didn't perform very well academically. I reminisced about the Subhashish of Class XI who went to quiz after quiz, and never won any of them, but kept going back because he believed that he began a journey with someone and didn't want to let her down. The one who began to memorise every word of the dictionary because he wanted to speak better English. The one who begged the 'powers that be' at school to give him the opportunity to excel. The one who stayed alone for a year, without television or internet, because that was the price that was asked of him. My life took a very dramatic turn on May 22, 2009 - and it is very hard for me to remember life before that. Everything since then has been dramatic, like a movie. I have felt so blessed, as if this was the accumulated karma of all those years. The point is not that there was an upward trajectory, but that there existed something before that. Something that was perhaps more mellow, and something I might have tended to look down upon. But something that is as integral a part of my as everything since then. Something that shapes who I am. I found a new respect for my past.

And that night, while talking about those days before May 22, I rediscovered the joy of failure. Because I remembered that the success I had seen of late just didn't compare with the years and years of failures I had seen before that. And I felt the fear of failure melting away. Things came to a head during the examinations, as the stress levels began to rise. But I found myself much better equipped to deal with it. The fear of failure, of course, will never completely go away. But I have finally begun to internalise how this is all a part of what I am, of what the human experience is about. If I could have come from that little room in DSOI, Dhaula Kuan, to this little room on Rose Lane, Oxford, then I can do that again. Failure will set me back, but failure will give me the tools to build something new.

But failures exist everywhere. Mubashir, my dearest friend, is as blunt and honest as they come, and one day he proclaimed 'Subhashish, you have succeeded at everything in life except love.' I often pass that spot where, back in December, the fear of another failure in love had crippled me. I played the tape of failure in my mind constantly. I made myself believe that I was incapable of this thing called love. Maybe I am. But what I do know now is that I do much better in life without that additional pressure. I learnt to value what I did right. That I did not let bitterness fill my life; that I continued to care, continued to love. That the spirit of sacrifice wasn't gone. That I had made myself immune to public ridicule because I knew that my heart was in the right place. Because I believed, and continue to believe, that at the end of all this, there will be redemption. When the weight of my actions will finally be balanced by the truth that I loved, and loved unconditionally. That one night, several months later, I could stand with my head held high and profess my love once again. And yet know that the love was noxious; that it was never meant to be. And then, for the first time in life, leave it behind and move on to something new. This, of course, isn't love as I once knew it, but it is something so refreshingly different that it makes me feel really happy within every single time. Things may, and probably will, go wrong. But there's no fear any more. In fact, there's a dead end waiting for me round the corner, but there's both hope that this isn't a dead end, and strength that even if it is, life will carry on.

Through all of this, I am grateful for the kindness I have been showered with. For all the times my friends have been annoyed with me; because that is when I have had the opportunity to stop and reflect. For my friends back home who have supported me so much over the last year; for all their encouragement and their love. For those who tell me what they like about me, and what they dislike. For those who tell me how I can be a better person. I had forgotten that life is a never-ending adventure. It took me a few hard knows to remember. And now I wait, with baited breaths, for the next adventure to begin. So I can run, fall and get up once again. 

A response to this article that was circulated on the Rhodes Scholars google group:
http://www.theguardian.com/commentisfree/2015/jun/03/city-corporates-destroy-best-minds

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Thanks for sending this article, Vivek, and for recently encouraging me to reply on this thread. As someone who already worked at McKinseybefore getting the scholarship, I have been amused at how the firm has, within the Rhodes community here, come to represent a particular kind of corporate culture. We are supposed to 'fight the world's fight', and that might explain our discomfort with these firms.

I believe, however, that if we end up believing that there is a set path to create a better world, and that these jobs are far removed from that path, then we risk falling prey to the kind of dogma that will prevent us from reaching that aim. There are different ways and approaches to improving the world, and people can and should be free to contribute in ways they want to. When we stop making sweeping generalisations and look within these firms to find individuals, I think we will realise that it is the individual who decides what to do with their life, and finds the best way to do it. 

1. Is consulting 'pointless', 'destructive', 'soul sucker' and 'useless': These are some of the adjectives Monbiot uses for jobs such as management consulting. Many Rhodes scholars have also expressed such apprehensions, albeit in more polite ways. Now, there are things that one would universally consider 'useful' or 'constructive', and then there are things that would may find useful depending on their values. I worked for several months on a report* that advised the government, among other things, to have a re-look at the abysmally low official poverty numbers, to increase spending on basic services such as healthcare and sanitation, to keep a strong role for the public sector and to improve governance to enable the poor to participate more fully. I also remember the days I spent in one of the poorest districts of India, working on a project that would bring electricity to a fraction of the ~ 400 million people in India living without any access to electricity. I fail to see what is 'pointless' or 'destructive' in what I did. Working in a plant to increase output might not seem like it contributes to making the world a better place, but then when I interacted with the (contracted) labourers, it was most obvious to me that what the economically weaker sections want is growth and jobs and all of that. Management consulting firms, therefore, are a pareto improvement over status quo.
   
   
2. We have but one life. However much money we make, we cannot buy it back: Firstly, I might not agree with someone who seeks to make lots of money, but that doesn't in any way make me right and him wrong. Just makes us different. Simple. The good thing about places like McKinsey is that they are secular. For thousands of people in countries such as India, they provide us an opportunity to live the life that we could never dream of. For example, it might be easy for scholars from first-world countries to imagine just packing their bags and leaving for foreign shores, but for me, McKinsey was the first time I stepped outside India. The entry barriers (visa procedures) set up for us are rather high, and take a lot of money (and time) to scale. And to be honest, I probably wouldn't be a Rhodes Scholar if it wasn't for my time at McKinsey. Because the lavish settings in which the Rhodes interviews are conducted intimidate anyone who isn't born into a modicum of privilege. We need to reflect on how many of our institutions, including our scholarship, are truly secular in the way a McKinsey is. Like those organisations, do we create opportunities based purely on merit (however it may be defined), or do we reward privilege with even more privilege? One needs only to go to Gurgaon, once a dusty suburb of Delhi but today the richest district in India, to witness this story of hope. Hope that isn't restricted to the corridors of privilege.
   
   
3. Is consulting a 'cult': Monbiot starts with saying that the purposes of humankind is to seek enlightenment, intellectual or spiritual; to do good; to love and be loved and to teach. I completely agree, but I fail to see what about management consulting prevents one from doing that. I found lots of love from people at McKinsey when I was there; some of them have, in fact, contributed to making me whatever I am today (for good or for bad). When I had typed out the email withdrawing my Rhodes Application after clearing the first round, it was a McKinsey Associate who prevented me from doing so by writing to the Partner on the study who convinced me over the next several interactions to give this experience a chance over the private equity offer I had. An Engagement Manager at McKinsey taught me to stand up for what I believe in, and to not mince words, in the face of disagreement from those 'senior' to me. These are skills one can also learn outside McKinsey - which is my point. These firms are reflections of the world. One will find the good, the bad and the ugly. Just need to learn how to deal with it. It isn't a 'cult' and certainly didn't trap me, neither did it try to.
   
   

The point around recruitment practices is one, as Natalya pointed out, something that is the most worthwhile to discuss. Some of it is justified because these occupations are unknown commodities and hence these firms need to make an effort to make themselves visible in a way academia or civil services don't need to. Where do we draw the line? How do we redistribute resources? And if we make an effort to level the playing field at university recruitment, what about later in life? Certainly those willing to 'sell out' to these firms after University would also tend to 'sell out' to them later in life? Brings me to my final question - are these students really our best graduates?

Regards,

SB

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* India's Path from Poverty to Empowerment: http://www.mckinsey.com/insights/asia-pacific/indias_path_from_poverty_to_empowerment