The Value of Time

In the US, when I had to hire people to help with moving my house, I paid them $25 per hr for the manual work – the money value of time there was quite high.

In contrast, physical goods in the US cost the same as in India, and sometimes, even less. I once bought pedestal fans at Walmart for $9 a piece – practically a throw-away price.

The biggest thing that differentiated the US from India was the money value of time.

In India, unskilled labor is cheap. And even skilled labor is not as expensive unless we go to the ultra-skilled category where people can easily move across geographies.

In India, we don’t think twice before spending an hour or two looking to save a few rupees while shopping online. Whereas, in the US, I have paid $10 to a concierge service just to book a doctor’s appointment for me – and mind you, the actual cost of the service was probably ten times that – the rest was paid by my firm (McKinsey).

If we want to see poverty going down, it will only happen if everyone, including manual laborers, starts getting good salaries. As we develop as a country, labor will become expensive.

The money value of time is the best indicator of how economically developed a society is. So let us not grudge it as people start demanding more for their time – that is how it should be.

– Rajan

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