It was not too long ago when economists fretted about the curse of jobless growth. That was because companies cut their workforce through most of the 1990s, and tried to squeeze more output from fewer workers. Economy-wide data, too, showed that new job creation was weak.
Industry lobby Assocham has done a quick-fire study of the wage bill of 75 companies that have already come out with annual financial numbers. Assocham says that the wage bill of these companies grew by 76% on an average in 2006-07.
It is unlikely that higher salaries alone can explain the rise in the wage bill. The number of workers, too, must have increased. Let’s do a quick back-of-the-envelope calculation. Suppose wage rates have shot up by 30%, though this is definitely an exaggeration. This means that the workforce has increased by an awesome 35%.
Jobless growth, did you say?