Industry needs a new compact with labor The old-school mentality of seeing labour only as a necessary evil, a cost to be kept as low as possible, regardless of what it means for their living standards and morale, is a short term view on par with shipping a consignment of shoddy goods to make some extra money on one export order. Labour is, at the level of the individual plant, a source of productivity and creativity, and, at the level of the economy, a source of demand for industry’s produce. Lowly paid labour with low morale does little good for individual enterprises or for aggregate demand economy-wide. The point is to put in place managerial practices and incentives to align workers’ interests with those of the enterprise as a whole. For this, managements have to be proactive and imaginative. It is futile to rely upon ability to put down, using force if required, any show of resistance by workers. It makes far more sense to tap people’s innate creativity at the workplace, both to make them happy and add to productivity.