How to become a middle-income economy first?

"Too many countries have failed to make the leap from middle-income to high-income group, afflicted by a malady now commonly referred to as 'the middle income trap'," wrote Jahanwi Singh. "Re-allocation of labour from low-productivity agriculture to high-productivity sectors, such as manufacturing, has been a primary channel through which today's advanced economies raised living standards. In India, growth in labour productivity has consistently declined over the past decade. The annual growth rate of output per worker has dipped from 7.9% in 2010 to 3.5% in 2019 as per International Labour Organization estimates," Mint. Reform of labor laws and increased use of technology should do the trick, thinks Singh. The fear was that robots will replace large numbers of human workers, instead, "New technologies can give corporations tools for monitoring, managing, and motivating their workforces" and makes it easier them "to maintain tight control on workers and squeeze and exploit them to maximize profits," Vox. "In recent years, Amazon has become the corporate poster child for automation in the name of efficiency -- often at the expense of workers." And yet, in April, Amazon "secured enough votes to defeat the unionization drive at one of its Alabama warehouses," CNBC. "Of the 3,215 ballots cast, there were 1,798 votes opposing the union and 738 in favor." "Gig economy companies such as Uber, Lyft, and DoorDash are fighting tooth and nail to make sure the people they enlist to make deliveries or drive people around are not considered their employees." In India, "According to the Annual Survey of Industries (2017-18), contract workers accounted for 36.4 percent of total production workers in the registered factory sector," wrote Rachicka Kapoor. "Contract workers, who are hired via an intermediary (contractor) are not on the payrolls of the company on whose shop floors they work," The Indian Express (TIE). The new labour laws have sought to help companies by allowing them to employ workers with fixed term contracts which will end without notice and without having to pay retrenchment benefits, and will help workers by paying the same salaries and benefits as regular employees, The National Law Review. But companies continue to prefer contract workers because "the monitoring, legal compliance and litigation costs are shifted onto the contractor, thereby reducing the transaction costs of recruitment to firms," TIE. Contract workers rioted in a Maruti factory at Manesar in Gurugram in 2012, damaging cars and machines and burning a manager to death. 100 management officials and 9 police officials were injured in several hours of rioting, NDTV. In December last year contract workers rioted at an iPhone production plant operated by Taiwanese company Wistron in Narasapura in Karnataka, techradar. An analysis of 1,130 companies showed that despite the prolonged lockdown due to the coronavirus in 2020-21, "even as revenues, at the aggregate level, fell by 6%, the operating profit of this representative set of India Inc shot up by 30% and net profit climbed by 48%," wrote Arjun Srinivas. "The revenue-profit dichotomy within corporate India suggests that companies went on a massive cost-cutting spree, which was at an order of magnitude different from what unfolded in other countries." "One major area of cost-cutting was compensation to employees, whether in the form of laying off staff, employing contract labour for fewer days, or by pruning salaries." India's factory activity contracted for the first time in almost a year in June as restrictions to contain the deadly second second wave of the coronavirus triggered declines in demand and output that pushed firms to cut more jobs," Reuters. Too many workers, not enough jobs. Stuck in low-income economy.