Minimum Wage Policy

What is the issue?

• Currently, the 7th Pay Commission Recommendations are being implemented.
• So the time is ripe for bettering the wages of those in the unorganised sector.

What constitutes the unorganised sector?

• About 500 million Indians languish in the “unorganised sector”.
• A disconcertingly large portion of them remain vulnerable to the vagaries of unemployment, exploitation, insecurity and poverty.
• Social degradation, cultural exclusion and developmental neglect are also other aspects that accompany this.
• Notably, this sector contributes 45% of the wealth of our country — though is often perceived a national liability.

What is the Pay-Wage dichotomy?

• Pay refers to the remunerations that are derived by those employed in the organised while wage refers to the unorganised.
• While pay revisions are widely discussed, wages of the unorganised sector doesn’t get the same level of scrutiny.
• Salaries have undergone big increases in India and corporate emoluments have are increasing rapidly too.
• But wages (in real terms) remains where it was before the beginning of the ‘New Economic Policy’ of 1991.
• Wages of the unskilled workers vary wildly from Rs 850 per day in Kerala to a third of it in most other parts of the country.

What can be a minimum accepted standard?

• The connection between poverty and the systemic injustice done to those bracketed in the “un-organised” sector needs recognition.
• We therefore need to evolve a rational minimum wage policy.
• The peons/attendants are the lowest paid in the organised sector, who currently have a minimum take away of Rs 25,000 a month.
• While there are a lot of other benefits in the organised sector, that those in the unorganised lack.
• We should therefore atleast ensure that the minimum wages in the unorganised sector are comparably close to the organised.

Source: Business Standard