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.


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