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Wages, unions, and labour productivity: evidence from Indian cotton mills

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  • BISHNUPRIYA GUPTA

Abstract

Clark and Wolcott attribute the low productivity of Indian cotton textile workers to their preference for low work effort, and suggest that unions resisted an increase in work intensity. This article argues that low wages were due to surplus labour in agriculture. Low wages allowed the persistence of managerial inefficiencies and resulted in low productivity and work effort. It uses firm-level data from all the textile producing regions in India to examine the relationship between unions and labour productivity. The findings show that fewer workers were employed per machine in the unionized mills in Bombay and Ahmedabad, compared to the mills in less unionized regions. These findings suggest that unionization increased wages and compelled managers to raise productivity

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  • Bishnupriya Gupta, 2011. "Wages, unions, and labour productivity: evidence from Indian cotton mills," Economic History Review, Economic History Society, vol. 64(s1), pages 76-98, February.
    • Handle: RePEc:bla:ehsrev:v:64:y:2011:i:s1:p:76-98
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    File URL: http://hdl.handle.net/10.1111/j.1468-0289.2010.00528.x
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    1. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    2. Clark, Gregory, 1994. "Factory Discipline," The Journal of Economic History, Cambridge University Press, vol. 54(1), pages 128-163, March.
    3. Brown, Charles & Medoff, James, 1978. "Trade Unions in the Production Process," Journal of Political Economy, University of Chicago Press, vol. 86(3), pages 355-378, June.
    4. Wolcott, Susan & Clark, Gregory, 1999. "Why Nations Fail: Managerial Decisions and Performance in Indian Cotton Textiles, 1890–1938," The Journal of Economic History, Cambridge University Press, vol. 59(2), pages 397-423, June.
    5. Clark, Gregory, 1987. "Why Isn't the Whole World Developed? Lessons from the Cotton Mills," The Journal of Economic History, Cambridge University Press, vol. 47(1), pages 141-173, March.
    6. Kim B. Clark, 1980. "Unionization and Productivity: Micro-Econometric Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 95(4), pages 613-639.
    7. Jordi Domenech, 2008. "Labour market adjustment a hundred years ago: the case of the Catalan textile industry, 1880–19131," Economic History Review, Economic History Society, vol. 61(1), pages 1-25, February.
    8. Steven G. Allen, 1986. "Unionization and Productivity in Office Building and School Construction," ILR Review, Cornell University, ILR School, vol. 39(2), pages 187-201, January.
    9. Wolcott, Susan, 1994. "The Perils of Lifetime Employment Systems: Productivity Advance in the Indian and Japanese Textile Industries, 1920–1938," The Journal of Economic History, Cambridge University Press, vol. 54(2), pages 307-324, June.
    10. Gregory Clark, 2007. "Introduction to A Farewell to Alms: A Brief Economic History of the World," Introductory Chapters, in: A Farewell to Alms: A Brief Economic History of the World, Princeton University Press.
    11. Bruce F. Johnston, 1951. "Agricultural Productivity and Economic Development in Japan," Journal of Political Economy, University of Chicago Press, vol. 59(6), pages 498-498.
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    Cited by:

    1. Gupta, Bishnupriya, 2014. "Discrimination or Social Networks? Industrial Investment in Colonial India," The Journal of Economic History, Cambridge University Press, vol. 74(1), pages 141-168, March.
    2. Tirthankar Roy, 2017. "The Origins of Import Substituting Industrialization in India," Economic History of Developing Regions, Taylor & Francis Journals, vol. 32(1), pages 71-95, January.
    3. J.A. Zumoff, 2016. "‘Is America afraid of the truth?’ The aborted North American trip of Shapuriji Saklatvala, MP," The Indian Economic & Social History Review, , vol. 53(3), pages 405-447, July.
    4. K. Shanmugan & Bhagirath Prakash Baria, 2019. "Agricultural Labour Productivity and Its Determinants in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 62(3), pages 431-449, September.

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