I visited the BMC Building market in Powai - this is a run down building built by the Municipal corporation for small businesses and shops. The vision was to build an equivalent of the Sim-Lim square in Singapore - when it was constructed, it had escalators, elevators and air-conditioned corridors. However, over the years, the escalators stopped working due to lack of maintenance, and leases expired and rentals fell rapidly during the Covid-19 pandemic, after which the air-conditioning broke down and recently one out of the two elevators also broke down.
Today when I visited the place, it was stinking of human sweat (its high-summer season in Mumbai) and the lack of air-conditioning made it worse. The staircase was so dirty that I did not feel like taking it, so I took the lift, but as soon as I boarded the lift, I regretted my decision. The lift was occupied by 5 delivery runners, two of them carrying dairy and one of them carrying meat - the stench in the lift was even more obnoxious than the stairs. Thankfully it was just one floor - as I was walking out of the lift, I saw another batch of 7 delivery boys waiting to board it on its way back up. I walked out of the stinking corridor, and almost sprinted to my car parked across the road. As I entered my car and switched on the AC, I felt a strange sense of relief and mental cleansing. It was almost as if going to the building was like taking a dip in the gutter!
As I reflected back, I realized the conditions which the delivery boys worked in all the time, while their services made my own life so much more convenient. A small minority of wealthy techies and corporate employees today demands so much luxury that whole industries have sprung up around fulfilling their needs - from food and grocery delivery, to home based spa and beauty treatment services. Over the years the delivery business has skyrocketed, it accelerated during Covid-19 when we were forced to be locked at home, but the habit just continued. Today you can even get a single can of soft drink or a bowl of soup delivered at a marginal delivery cost, while the restaurant can still charge you a premium for the food. This has led to a growth in people employed in these sectors, but at what cost?
This whole experience got me thinking about the world we are increasingly becoming - incomes are rising across the globe, the rich are becoming richer, but poor are not becoming any better off. The pay that people employed in these sectors get is barely enough to scrape a living in cities which they migrate to. At the same time, if these workers were to be paid more, the demand for their services will reduce drastically leading to their jobs getting obliterated. Its a strange dichotomy where they can either just survive at low wages or perish without a livelihood. There is no way for these poor to rise up the social or economic ladder.
Thesis
We are entering a dark new phase of global development.
While global incomes have risen and poverty reduction continues in statistical terms, a deeper divide is crystallizing - one that separates the producers of everyday necessities from the profiteers of luxury and specialization. The current economic trajectory favors capital-intensive, elite-driven automation fueled industries while suppressing the livelihoods of those in essential but tightly controlled sectors.
In this post, I try to explore various interrelated ideas:
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Why wage stagnation persists in essential sectors like farming, delivery, and mining
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How government and market forces suppress prices—and incomes—in mass employment sectors
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Where the exponential wealth curve is headed and why it's deeply unsustainable
1. The Inversion of Value: When Essentials Are Cheap, So Are Their Producers
The global economy is experiencing a paradox: while luxury products surge in value, the basics remain artificially affordable.
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Luxury inflation vs. subsistence stagnation: Goods like art, tech gadgets, and high-end experiences are becoming status symbols whose prices reflect exclusivity and branding. In contrast, staple goods—food, clothing, basic utilities—are intentionally kept affordable through subsidies, regulation, and price controls.
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The cost of keeping basics cheap: To maintain affordability, input costs must stay low. That often means suppressing wages for those who grow, mine, transport, or assemble these essentials.
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Structural suppression of income: Studies confirm a large income disparity between farmers and urban populations in low-income nations, with urban incomes typically multiple times higher than rural farming incomes. This is farmers despite producing the majority of food consumed both domestically and abroad.
This is not just the result of market dynamics, but of deliberate structural design of our policies from post WW-II economic era which we haven't revised since.
Let’s take a closer look at the sectors that employ the majority of the world’s population—and why they remain trapped in low-income realities.
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Most governments impose price ceilings, regulate seed distribution, and control land ownership in the name of food security.
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In countries like India and China, over 40% of the workforce is engaged in agriculture, yet the sector contributes less than 20% to GDP.
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According to the FAO, the real income of smallholder farmers has declined or remained stagnant in over 60% of developing nations over the last two decades.
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Global supply chains are optimized to minimize labor costs. From garment factories in Bangladesh to lithium mines in the Congo, workers are commoditized.
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Automation and low-cost outsourcing mean that laborers must compete not for growth, but for survival.
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Gig workers, drivers, cleaners, and delivery personnel form the backbone of the consumer economy.
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A 2023 ILO report showed that while demand for these services grew, real wages declined in many cities due to platform exploitation and lack of labor protections.
These sectors are designed to keep prices (and thus wages) low—ironically trapping the very people they rely on.
3. The Infinite Upside of Specialization: The Rise of the Exponential Class
Now contrast that with the industries that thrive on scarcity and specialization.
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A Michelin-starred chef or a crypto developer can earn in a year what a farmer might in a lifetime—not because they work harder, but because their outputs are rare, branded, and consumed by the wealthy.
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Tech startups, biotech firms, and luxury brands have low employment density but high profit margins. The result? Enormous wealth concentration in the hands of a few.
As Thomas Piketty argued in Capital in the Twenty-First Century, when return on capital > economic growth, inequality is inevitable. We're watching that unfold now.
And the danger isn’t just economic—it’s societal.
Toward a Dystopian Future: A World on the Exponential Curve
We are witnessing a shift from the normal distribution—where most people clustered around a median—to an exponential curve, where most people languish while a select few soar. This led me back to the scenes of the Matt Damon starrer - Elysium where the rich live in mid-air luxury enclaves powered by AI, drone transport, and climate control, while the poor perish in the ground-level labor colonies plagued by disease, overpopulation, and climate-induced resource scarcities.
But with the trends I have outlined above, this may not remain science fiction - it’s the logical extension of current trends. If current policies continue, the economy will no longer be a ladder, but a chasm.
How Do We Fix It? The Economic and Moral Imperative
If the system is broken by design, it must be redesigned. Some policy solutions like Universal Basic Income and minimum wage already exist. However, many of these policies may also backfire because they will increase the wages at which labor will be available, thus exacerbating the use of automation (drones, AI, self driving cars etc.) replacing human labor.
To counter these we need to add mandatory social security to all workers in form of free education and basic healthcare. With these two livelihood basics sorted, the poor get an opportunity to reskill themselves and pull themselves out of poverty so that they can move into more value added work and reap the benefits of automation and AI tools rather than be replaced by them.
And at the same time to redistribute exponential wealth without crushing innovation, we need to improve our grip on progressive taxation systems which has been weakened by recent laws. We need to ensure that the wealthy are incentivized to part with their wealth by engaging in philanthropy and redistribution rather than hoarding it for future generations.
The world doesn’t need to become a techno-feudal dystopia—but it might, unless we act..
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