As The Govt Proposes To Hike Minimum Wage, This Is What It Means For India’s Labour Force

Posted on August 14, 2015 in Society

By Vaagisha Das

As a result of wage differences, violent clashes at the country’s biggest carmaker Maruti Suzuki India Ltd led to the death of one company executive. This is just one example of many that demonstrate unrest among the labour force on the basis of wages. In such times, the government’s proposal of hiking the minimum wages of the workers comes as welcome news. In addition to a 25% hike in minimum wages, the proposal seeks to enforce the minimum wage law in all states rather than making it optional, unlike the previous laws. States are divided into tiers according to their per capita income, and workers – unskilled, semi-skilled, and skilled – are to be paid accordingly. All the states would have mandated labour hours and wages, yet, things would stay much the same for those working in the unorganised sector, as only a handful of states include domestic workers in minimum wage laws- surprisingly, Delhi not being one of them.

Implications Of The Proposed Amendment: How It Would Benefit The Workers

The Minimum Wages Act of India, 1948 legally grants a minimum wage for workers in many industries and periodically fixes minimum wage for those workers employed in activities listed in the “employment schedule” of the government. This could be both at the state and at the central level, i.e. both the central and state governments can initiate, implement and share responsibility with regard to labour laws. The proposed revision of the wages would mean amending the aforementioned law in order to fix ceilings. An increase in the minimum wage would benefit the poor, since the living wage in India is greater than the minimum wage; hence a hike could go a long way in improving the living standards of the economically weak.

The proposed amendment would also benefit workers if applied uniformly across the states. It could ensure better conditions of employment as well as provide a safeguard so that agricultural labourers do not feel the need to switch jobs or migrate during off seasons, as many of them are wont to do. If imposed, a minimum wage would also prevent employers from laying off labourers for those who are willing to work for lower costs.

Concerns Regarding The New Law

In lieu of minimum wage being increased in other sectors, there have been concerns that raising the minimum wage may draw labour away from farming, and lead to a manpower shortage in agriculture. But the probability of this happening seems small, as this sector has weathered the impact of the jobs-guarantee scheme, which assures 100 days of work to at least one member of every poor rural household.

Another legitimate worry would be the gradual substitution of workers with limited skills with those who are marginally better suited for the job. This would cause unemployment to skyrocket among the older workers as well as those who lack experience- employers would seek to employ more efficient labour for the same wage. However, workers unions are expected to step into place in order to prevent such hasty layoffs.

Unaffected By Hikes In Minimum Wages, The Plight Of Domestic Workers Remains The Same

I have told my family I work in a factory. They look down upon domestic work,says Khushboo, a domestic worker from Nalanda district in Bihar. However, respect from family members doesn’t even come close to topping the list of grievances that domestic workers like her face. The proposed law is applicable to both informal and informal sectors as long as the activity belongs to the employment schedule list- but domestic work does not fall into either of these categories.

The definition of paid domestic work across the states is not rooted in the employment relationship which governs this sector but in the societal understanding of domestic work as a non-technical and unskilled operation. The employment relationship is often undeclared and has no written contract involved; there is an unequal balance of power between employer and employee, and a lack of precise job description. Furthermore, the workers are expected to be available at all times. These workers may include minority groups who are easily vulnerable to exploitation, who would ensure that their wages are duly paid according to pre-set standards?

A Glimmer Of Hope

In this instance, one of the most important interventions has been the inclusion of domestic workers in the list of scheduled employment under the Minimum Wages Act of 1948 in a few states of India. Such a legal extension recognizes private households as workplaces making it an important legal change in the concerned states. There are a total of seven states where the minimum wages for domestic workers has been implemented; of which Karnataka was the first, followed by Bihar and Andhra Pradesh. This raises hope that this not so beaten track may be followed by others as well, so that we can claim better employment benefits uniformly for all the sections of the community.