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Saturday, May 08, 2004

All India, All the Time

Labor Blogger Nathan Newman, who's gotten me off on an all India, all the time kick, has responded on his blog. He posts a very interesting article from Economist article saying basically that one of the poorest Indian states (Bihar) has a corrupt government. Newman highlights a section of the article claiming that wages are falling for migrant agricultural workers in a few states, due to mechanization. Presumably, Newman isn't really opposed to the mechanization of agriculture, so I remain puzzled as to what any of this has to do with globalization.

In his comments section, Newman more or less backs off from his earlier claims about "global pressure to lower wages," or at least doesn't defend it. He writes, "I agree that average wages can rise, yet many workers still see their wages fall. It's the unevenness of growth that is the issue." The Economist article suggests that the obvious response to uneven growth in India is to increase public investment and to fight corruption in India's poorer states. This makes sense to me, while blaming globalization for the mechanization of agriculture makes no sense at all.

Since one of the self-imposed mandates of this blog is to talk about data, I should mention that the Economist's evidence that wages are falling for agricultural workers in Punjab is anecdotal: a few migrant workers say so. As I've noted, the evidence on the other side consists of careful surveys that show rapidly falling poverty in Punjab, and India as a whole. Why shouldn't we trust the migrant workers? One obvious reason is that their experience might not be typical. Another is that there's no time period attached to their reports. It may well be that agricultural wages are down this year, after having risen rapidly for decades. And the agricultural workers may well respond by moving into higher-wage sectors next year, perhaps into construction.

Overall, the real issue is Newman's repeated claims that rising average wages rising in India mask ominous trends for many workers. But the fact is that poverty is falling rapidly in India. And this is poverty by India's definition, which means roughly a dollar a day. Specifically, India defines poverty as a level of expenditure "sufficient to provide an average daily intake of 2,400 calories per person in rural areas and 2,100 calories per person in urban areas, plus a small allocation for basic nonfood items." So this is really a big deal, and spouting boilerplate denouncements of "globalization" in response to India's tremendous success is, at best, just plain ignorant.

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