Sunday, September 23, 2007

Retail Jobs

When was the last time you saw a vacancy note like this, calling for HSC as a qualification? Other than the badly printed two-tone notices calling for railway recruitment and the like? Jobs are being created, even as some people crib about them being taken away. That, by the way, is reality. Jobs come and go, the way people make their living changes. This sign spotted at a Navi Mumbai branch of a retail store a few days back.

Indian retail is growing at 30% per annum and there is a lot of space there. Show me one vegetable vendor or kirana who created as many jobs.

5 comments:

Raj said...

"Show me one vegetable vendor or kirana who created as many jobs."

So, what? Why should potential to create jobs for others be the yardstick? Thousands of new vegetable vendors spring up all over the country every year, creating self-employment and adding to the decentralised supply chain.

Nikhil Narayanan said...

@Raj
Do you expect an HSC pass guy around you to start selling vegetables from tomorrow? U got it wrong!!!!
He would prefer working in a Reliance Retail or Birla's Fabmall..

Neelakantan said...

Raj, two things. The job creation is not an end in itself (though, it really is). The point is growth. A million vegetable sellers does not mean too much, except some more money in traders pockets and more unsustainable jobs, but a million jobs does.

And second, in our country the manufacturing sector is not as prevalent in, say, China and especially in cities. So, as Nikhil rightly points out, for those who are not very well educated (for whatever reason), this opens up newer avenues.

Raj said...

Neela, Nikhil : Retail is certainly necessary and can be justified in terms of cost efficiency, shopping convenience, cleanliness, better shelf life of products, scalability, etc. But, I am not sure if it can claim to create more jobs.

It may be a fact that retail is growing at 30% CAGR. That doesn’t automatically translate to 30% more jobs, on an absolute scale. On the other hand, retail’s cost efficiency comes in because, as it ramps up scale, it can kick in higher revenue per employee.

So, I would expect 1 employee in retail to generate as much sales as 5 vegetable vendors. Result, 4 road-side vendors are unemployed.

Not that this is bad, by the way. In a free-market where laws of economics are allowed to prevail, these unemployed vendors should find income alternatives, that are most efficient. Tragic for some in the short term, but better for many over the long term.

So, while promoting retail, push the efficiency argument; don’t go down the road of ‘more jobs’.

Neelakantan said...

The rediff piece was about jobs, I used that comparison point right away, but by no means is it the only point. Overall, yes, organized retail is better than the current system for almost everybody except for the traders...