The income ratio divide: 33% in India versus 57% in U.S.

In India about a third of the economy’s income goes to labor while the same is about more than half for U.S.

However, when purchasing power dries up to the extent that rural laborers and urban blue-collar workers have to think twice about cheap munchies, then the situation is desperate. The culprit is deep-rooted wage suppression, a long-term issue that needs attention. About a third of the economy’s income (33.2%) has gone to labor, with providers of debt and equity capital taking the rest, according to India Ratings and Research Pvt., a unit of Fitch Ratings. Compare this 33.2% labor share to the developing-economies average of 37.4% and almost 57% in 2016 for the U.S.

At the same time, only 32% of the production of a bloated public sector is shared with the taxpayers and banks that provide the capital; as much as 68% goes to a privileged group of state and quasi-state workers who enjoy assured jobs and higher pay than they would in the private sector.