From Minimum Wages to Living Wages

 

Context :

Labour ministry weighs shift from minimum to 'living' wages   …ET / 29 Dec 2022

 

Extract :

 

India is considering shifting from the minimum wage to living wages to pull millions of people out of poverty.

While it can have huge financial implications for India Inc and the government as a living wage is indexed to inflation, the move could be a game changer for the country as it strives to meet its Sustainable Development Goal (SDG) commitment of eliminating extreme poverty by 2030.

Highlights :

 

Line of Support  :

 

#   Shift to living wages can help reduce extreme poverty by 2030

#   Difference between the two could be 10 – 25 %

#   Move could have huge financial implications

#   India has 228.9 million poor people as per MPI

#   The idea is yet to get a political backing

#   Living wages are based on Cost of Living

 

A living wage is defined as the minimum income necessary for workers to meet their basic needs compared to subsistence wage or minimum wage which is based on labour productivity and skill sets

India could seek ILO help to arrive at living wages if the idea gets a political backing

 

 

My  Take  :

 

Such an initiative is long overdue but, after arrival of COVID , it has assumed urgency

In our country, as in the rest of the world, INCOME DISPARITIES are increasing – which in turn, result in WEALTH DISPARITIES

Some 3 % of our population control 90 % of our wealth

Taxing the rich ( at a much higher rate than the current rates ), can get the government, a few thousand crores ( Rs ) additional revenue

But that would be “ neither here nor there “ . It will not help the poor to meet the ever-rising “ Cost of Living “

Nor is introduction of an UBI ( Universal Basic Income ) , a viable proposition

There are many problems associated with finding a proper linkage between :

Ø  Cost of Living , and

Ø  Living Wage

 

“ Cost of Living “ varies vastly depending upon following factors :

Ø   City – District – State

Ø   Population Density

Ø  Intensity of Industrialization / Agriculture

Ø  Time of the Year ( Seasonal fluctuations )

Ø  Education Level of concerned citizen

Ø  Skill concentration of people

Ø  Size of family of the poor people

Ø  Distribution of “ Employed “ vs “ Self Employed “

Just because a problem is very complex, must NOT produce an  “ACTION PARALYSIS “

I hope that , in her Budget Speech , day after tomorrow, Smt Sithaaramanji , make an announcement in this direction – at least , a “ Declaration of Intention “

I urge her to fix a target date ( 02 Oct 2023 – Gandhiji’s birthday ), to come out with a DRAFT PROPOSAL for introduction of LIVING WAGE for India’s poor

She would NOT be able to announce such a FAR REACHING reform in her Feb 2024 budget speech, since with forthcoming General Elections ( by March 2024 ? ), it would be a “ Lame Duck “ budget

 

With regards,

Hemen Parekh 

hcp@RecruitGuru.com / 30 Jan 2023 ( Bapu’s Nirvana Diwas )