ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Another Committee for Minimum Wages

Minimum wages in India fail to recognise social realities of labour outside formal labour relations.


The Ministry of Labour and Employment recently announ­ced the formation of an expert panel “to provide technical inputs and recommendations on fixation of Minimum Wages and National Floor Minimum Wage.” While the terms of reference have not been announced, the panel’s tenure is set at three years. The new panel comes amidst discussion surrounding the draft rules on the wage code, which were notified in July 2020. The Code on Wages, passed in July 2019, consolidates four prior legislations pertaining to wages. It has mandated a floor-level wage at the national and regional level, as well as a simplification and broadening of the different employment- and occupation-related minimum wages. However, the draft rules do not appear to enhance clarity on coverage or enumeration of minimum wages. The second wave of the pandemic has delayed the final notification of these rules. In this context, a new committee to recommend floor-level wages is a little surprising, considering that in early 2019, another expert committee with a similar mandate had submitted its recommendations to the government.

The “Expert Committee on Determining the Methodology for Fixing the National Minimum Wages,” in its report submitted in January 2019, outlined a methodology for enumeration of minimum wages, which used consumption expenditure and employment data to arrive at a figure that allowed for a balanced diet, other non-food essential items and expanded the units of consumption per household. Based on this, the committee stated a figure of `375 per day as a national floor-level minimum wage, with regional variations, and a “city compensatory allowance” for workers in urban areas. While this figure is much higher than the non-binding national floor wage of `176 (based on National Commission of Rural Labour Recommendations), it is much lower than the `600 demanded by trade union federations, based on the 7th Pay Commission recommendations.

Committees formed to devise a methodology for minimum wages in India are not a “once-in-a-generation exercise.” They may take on different names, but they ask similar questions, setting criterion with marginally different positions and intentions, each time. Meanwhile, minimum wages continue to be set and revised, haphazardly across different states and scheduled employments. Minimum wage enumeration, as the most recent committee (2019) also acknowledges, is based on two key features: first, the recommendations of the 15th Indian Labour Conference (1957), and second, the Supreme Court judgment in Workmen v Reptakos Brett (1992). The former outlined the need-based minimum wage, stipulating criteria for proper dietary intake, adequate clothing, housing requirements as well as other expenditure such as fuel, etc. The latter expanded the notion of minimum wage to include children’s education, medical care, recreation, and contingencies such as marriage and old age. Taken together, both these provide a substantive and concrete understanding of need and well-being in determining minimum wages. However, subsequent committees, including the most recent, have tried to follow these recommendations, but only in a very skeletal way.

In the 1950s, such recommendations were seen as beyond the scope of a low-income economy, and now they are seen as hindering investment, with any upward revision in minimum wages resisted by employers en masse. The wage of a worker somehow continues to be reduced to the price that labour as a commodity deserves in a market economy. Statutory wage regulations recognise the limits of such market-driven processes and aim to de-commodify the labourer. The wage is meant for the reproduction of the labourer, contributing to a fulfilling and decent life. Yet, in the quantification of “reproduction of labour,” the normative basis for determining a wage is revealed. So, when we refer to “reproduction of labour,” do we mean “labour power” (as commodity) or “labour” as a social being? “Labour power” unfortunately reduces labour to a commodity, while “labour” as a social being is constituted by a range of relations that are fundamentally hinged, quite often, on unpaid labour performed in the household mostly by women. An exercise in “quantifying” quite often defines wages for “paid” and “visible” labour power, while ignoring the unpaid and invisible. The social being that is the labourer is somewhere lost in a wide basket of prices, and the wholeness of the labourer seen as the sum of goods that allow for the reproduction of labour power.

The erosion of this social being can be discovered in the origins of minimum wage legislation and the social reality that it seeks to combat. Minimum wages as a concept, historically, emerged from a focus on “sweated labour,” and in fact, the Minimum Wages Act, 1948 was conceived to provide some modicum of wage security to those who were outside the ambit of collective bargaining and organised wage settlements. Underlying this are two assumptions—those in such employment arrangements are unable to demand wages and are subject to labour relations that are coercive, unrecognised and without security of tenure or wages. The idea was that if minimum wages were ensured, then over time it would ensure a decent standard of living. However, non-payment or severe underpayment of wages are the outcome of socio-economic processes requiring wages to remain below a certain level to ensure profit; in other words, the reality of minimum wages is the socially constituted market reality. Workers continue to resist such practices, evident in numerous wage settlements in labour tribunals and strikes, and yet minimum wage enumeration continues to ignore the socio-historical disjunct between what is due and what they receive.

To confirm this, methodologies to evaluate poverty lines that are markers of destitution, constantly overlap with those for minimum wages. This is not surprising because minimum wages are meant to deal with labour outside formal labour arrangements, but in a deeply hierarchical society like India, this becomes the range within which a class of the most exploited, invisible, and oppressed workers are placed. So, committees may continue in their quest for floor-level wages, but they end up reinforcing existing ceilings.


Updated On : 5th Jul, 2021
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