The single-minded focus on jobs in India’s public discourse is leading to a dangerous neglect of wage exploitation. Wage poverty and its consequences never become enough of an issue for the Indian political class and policymakers. Or even the media.
The latest report titled State of Working India (SWI) 2023 by Azim Premji University’s Centre for Sustainable Employment points to wage stagnation in post-Covid India. It shows that its consequences are deeply worrying.
With the next Lok Sabha election just six months away, political parties are promising to provide employment, monthly handouts to women, welfare schemes for gig workers, and to restore the Old Pension Scheme (OPS). There has been a rise in the number of regular-wage or salaried workers and a decline in the share of the workforce in agricultural employment. The report offers numerical estimates of various categories of workers, including youth, Scheduled Castes (SCs), and women.
The SWI report offers fresh evidence of wage stagnation in the last five years. Its findings have already been widely reported for its insights on structural changes in employment in the country. There has been a rise in the number of regular-wage or salaried workers and a decline in agricultural employment share within the various categories of youth, Scheduled Castes (SCs) and women.
But it also flags some distressing issues. Between 2017-18, when average monthly earnings for the self-employed were Rs 12,318, and 2021-22, the monthly wage rate actually declined to Rs 12,089. In the previous two years, wages were below Rs 12,000 a month.
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A depressing picture
Data analysis by The Hindu in August 2023 showed that while the cost of meals rose by 65 per cent in five years, salaries/wages rose by just 28 to 37 per cent, and essential food items became increasingly unaffordable.
The average casual wage, which was Rs 6,959 in 2017-18, continued to rise marginally every year and reached Rs 7,856 in 2021-22. Casual workers are the only category whose wages did not stagnate. But average monthly earnings of regular wage workers rose by just Rs 6 in five years, between 2017-18 and 2021-22. The report says the earnings series clearly shows the Covid effect for 2020-21.
The SWI report also looks at average monthly labour earnings across states (2021-22) for various types of employment. The data shows levels of total labour income ranging from under Rs 10,000 per month in the case of Chhattisgarh to more than Rs 20,000 per month in the case of Delhi and Goa.
Among states going to the polls later this year, Madhya Pradesh has the lowest average casual wage rate at Rs 4,951, and Chhattisgarh is marginally higher at Rs 5,643. The figure for Telangana is Rs 6,954, and for Rajasthan, it is Rs 7,854. The corresponding daily wage rate for casual labour in these five states ranged from Rs 165 to Rs 261. The data is derived from various rounds of the Periodic Labour Force Survey.
With the exception of Delhi, Goa, Kerala, Jammu and Kashmir, Ladakh, Uttarakhand, Sikkim, and Arunachal Pradesh, casual labour wages remain low. Across the states in the plains, casual wage labourers earn less than Rs 10,000 a month. No wonder migrants from Odisha, earning less than Rs 6,000 a month, take the train to Kerala where the casual wage rate is more than Rs 11,000 a month.
The average monthly earning of a regular wage labourer is lowest in West Bengal and Assam—at around Rs 15,000 a month—and highest in the hill states of Arunachal, Ladakh, and Mizoram—at around Rs 31,000 a month. Among the Hindi heartland states, it is the highest in Rajasthan at Rs 23,000 a month.
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Uncertain market, policy neglect
Depressed wages are partly a function of an uncertain job market and increased contractualisation. The annual survey of industries data released by the Labour Bureau in July 2023 showed that the trend began before Covid. Employing contract workers increased by as much as 71 per cent between 2018-19 and 2019-20. This is a trend that needs to be flagged.
They are also a function of policy neglect. The Telegraph last month reported the delay in the revision of the national floor level minimum wages by the Narendra Modi government. It quoted the Economic Survey 2022-23 to say that the purchasing power of the amount received as wage by workers, known as real wage, has been negated by inflation.
The national floor level minimum wage set by the labour ministry is Rs 176 per day or Rs 5,280 a month. This is the rate below which states should not fix their minimum wages. It was last revised in 2017, though it is supposed to be revised every two years. That’s how casual the government is about setting minimum wage rates. Meanwhile, inflation is causing havoc on household incomes.
Even as the National Multidimensional Poverty Index reported a drop in poverty, there comes fresh evidence that due to low incomes, Indians are majorly malnourished. Based on the State of Food Security and Nutrition in the World report, it concludes that the cost of a healthy diet in India is the lowest among the BRICS nations (Brazil, Russia, India, China, South Africa, and the newly added countries) and other neighbours. Yet, a healthy diet is unaffordable for nearly three-fourths of the population, making India the fourth most malnourished country after Ethiopia, Pakistan, and Nepal. A diet is considered too expensive if it costs more than 52 per cent of a country’s average income. That is how much people in low-income countries spend on food.
In June 2021, the labour ministry set up an expert committee “to provide technical inputs and recommendations on fixation of Minimum Wages and National Floor Minimum Wages” and gave it a mandate of three years. Evidently, the government feels no urgency in enforcing what the country’s poorest should be paid.
The Code on Wages was passed in 2019 but has not been implemented yet. In 2017, the Anoop Satpathy Committee was appointed to review minimum wages and submitted its report in 2019. The huffing and puffing resulted in zero outcomes for the labourer on the street.
Another problem is that minimum wages are revised by governments but not enforced. The Aam Aadmi Party (AAP) government in Delhi likes to score brownie points by revising minimum wages twice a year, but these are not implemented. There is no labour beat any more for journalists, so nobody looks at the issue of wage enforcement. The ubiquitous security guards seen all over the city are hired through guard agencies that feel no compulsion to pay the prescribed wages.
Wages of informal labourers neither become an election issue nor do they count as a measure of poverty. Gig workers have become a more emotive issue for both politicians and consumer-voters than wage exploitation of construction workers, sanitation workers, domestic workers, and agricultural and forest workers. Perhaps it is because gig workers are more visible — a part of urban consumers’ daily lives — while the latter remain at the margins.
Sevanti Ninan publishes the weekly labour and employment newsletter, Worker Web. Views are personal.
(Edited by Humra Laeeq)