During my first visit to India nearly three years ago, I was staying in the city of Trivandrum near the southern most tip of the country. One evening, I found myself at a local grocery store to buy some snacks. When I walked into the store, I was greeted by one of the staff and another person handed me a basket. Then as I wondered through the store, I noticed that there was a staff member in each isle there to help me find what I needed. At first I thought this was great, but then, when I was ready to check out, a different employee took my basket of groceries and set it by the checker who was going to ring me up. The checker then took each item out of my basket and searched for the price on the computer. After she totaled up my items, I paid for my items and she gave the receipt to another employee at the end of the checkout line who compared every item to the receipt before putting it in a bag. He then gave me my receipt and passed the bag to one last person who finally handed it to me as I walked out of the store.
My trip to the grocery store left me dumbfounded. In the course of buying half a dozen items, I encountered seven staff members. The next day, while on the bus to our worksite, I asked our host about the phenomenon I had experienced the night before. He explained to me that each person at the store got paid very little and there was no need for such a large staff, but if the owner of the grocery store didn’t give them a job, then they would not have anywhere to work. He said this business practice was common in India, at least in the southern region where we were, because it is better to have a job and get paid very little than have no job at all.
Does this make economic sense? Is there a benefit to having many people working for very low wages than having fewer people work for higher wages? In the United States, we would answer that fewer people being paid a higher wage promotes productivity and efficiency, therefore encouraging business and economic growth. But, with over a billion people in a country one-third the size of the United States, where will everybody work? How does unemployment affect the development of communities and quality of life for the people?
I could write an entire research paper on this topic, but please share your thoughts about whether these business practices are beneficial or detrimental to the social and economic well-being in India. Can we in the U.S. learn something from India as we prepare for substantial population growth?