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New Delhi: Indian state governments often set their minimum wage at the national minimum wage recommended by the Union Labor Ministry, according to a report by the International Labor Organization.
He added that minimum wages often show wide variations between states, unrelated to the cost of living, for the same type of employment. Indeed, the 1948 Minimum Wage Act does not specify on what basis minimum wages should be fixed or revised.
The Indian pay report, released last month by the UN agency, highlighted what it considers to be flaws in determining India's minimum wages.
He recommended that wage revisions be linked to the cost of living, GDP growth and increased labor productivity.
Santosh Mehrotra, president of the Center for Informal Sector and Labor Studies at the UNJ said that any increase in labor productivity – the output of workers driving growth – should be adequately rewarded by an increase in wages. .
A fair wages committee consisting of employers, employees and government officials was created in 1948 to recommend a minimum wage setting framework. The committee has defined three salary levels: the living wage, the fair wage and the minimum wage.
The living wage was the highest and covered the cost of food, clothing and housing for the family and the education of his children, as well as health and old-age insurance expenses.
The minimum wage was defined as a living wage plus a "standard" wage, the latter being left undefined. The fair wage was indefinitely between the living wage and the minimum wage.
The Constitution, adopted in 1950, proposed a "living wage" as a goal that the state should attempt to achieve. But the Center and state governments have chosen to stick to the minimum wage, according to the UN report.
The 1948 Minimum Wage Act, which aims to protect both regular and casual workers in both organized and unorganized sectors, empowers states to set various wages and revise them at intervals not exceeding five years.
Such a regular review should ensure that wages in each state remain in line with their socio-economic realities. But the UN report says that minimum wages have often been revised "arbitrarily, without full consultation with the social partners".
The Center applies separate minimum wage rates for 45 categories of jobs, including agriculture, mining and oil extraction, while the various states have lower rates of pay. separate minimum wage for 1,709 categories of jobs.
Minimum wages are primarily aimed at ensuring that private employers do not change the workers they hire. They apply to about 66% of the country's workers, who are employed in a list of jobs whose number has increased from 13 in 1948 to 376.
Workers in non-regular jobs have their wages determined by collective bargaining.
The national minimum wage rate, which does not bind states, was introduced in 1996. This rate is revised taking into account inflation. It was revised for the last time from 160 to 176 rupees a day in July of last year. The Payroll Code Act, introduced in Parliament, aims to introduce a binding national minimum wage.
The UN report cites an estimate that nearly one-third of the country's workers were paid less than the national minimum wage in 2009-2010, and women were generally paid less than men.
He noted that the minimum wage for agricultural work ranged from 80 rupees in Arunachal Pradesh to 92 rupees in Odisha, Rs 170 in Mizoram and Rs 178 in Haryana in 2011.
In 2013, the minimum wage for farm workers ranged from Rs 80 in Arunachal to Rs 126 in Odisha (revised) and Rs 269 in Karnataka.
In Maharashtra, the minimum wage for agricultural labor, which occupies the largest share of workers, accounted for only 73 percent of the national minimum wage in 2013, according to the report.
He added that the difference between the highest and lowest minimum wages in a state ranged from 1.4 in Karnataka to 4.8 in Andhra Pradesh, which represents huge disparities.
"Minimum wage revisions based solely on price inflation will not improve the purchasing power of wage earners and will not guarantee equitable sharing of the fruits of economic growth," the report says.
"For it to be effective, wages need to be reviewed regularly while taking into account changes in the cost of living, GDP growth and labor productivity growth."
The report quotes government data indicating that of the country's 195 million employees, 74 million (or 38 percent) are regular employees and 121 million (62 percent) are casual workers.
Mehrotra said the government should give workers social security and focus on creating jobs in non-farm sectors.
"The higher the number of jobs, the higher the minimum wage, the minimum wage policies must go hand in hand with social security for the unorganized sector and the growth of employment in the non-wage sector. agricultural, "he added.
"Social security should cover old-age and life insurance pensions, as well as maternity benefits for female workers."
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