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There is the obvious pain for those without jobs, and for those losing them, but at one level, the solution appears to be simple: just wait for the economy to pick up, or try and stimulate growth by lowering interest rates. The problem with that is, even if growth were to rise, the elasticity is falling since employers simply don't want to hire more labour. Just look at the rise in production levels at any automobile plant, and you will find it is much higher than the increase in the number of jobs created. This applies even to labour-intensive production like readymade garments. Even while the global demand is rising, countries like Bangladesh are running away with the lion's share — Indian wage levels are rising faster than productivity and Indian exporters are reluctant to hire people in large numbers since, once the export orders are completed, they can't fire the labour. Till labour laws are fixed, therefore, India's jobs crisis will only get worse.
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- Douglass North emphasised institutions when markets were the focus
- ‘Bovine Divine’ controversy lurched between the horrific and the comic
- PM Modi’s achievements abroad appear to cut little ice back home
- Post 13/11 sloganeering at Antalya and Kuala Lumpur won’t be enough
- Can Parliament be insulated from the vagaries of the political climate?