Delhi Textile Strike-Implications of Linking Wages to Productivity

Implications of Linking Wages to Productivity Sharat G Lin Following the precedents in Bombay and Coimbatore, the Delhi textile strike has once again raised the issue of linking wages to productivity. In practice the major impact of such provisions is not to increase production through incentives to workers, but rather to enable management to rationalise reductions in workforce in order to reduce the man-machine ratio. Unlike in Tamil Nadu where labour productivity in the cotton textile industry is rising, in Delhi it is decisively declining. This means that if present trends continue and wages are linked to productivity, real wages may be expected to decline in Delhi. This is only a part of the broader dilemmas faced by a dying industry.