Minimum wage

Approximately 18 lakh workers from 10 central trade unions joined a nationwide strike on Friday to protest against the Centre’s alleged “anti-labour” and “pro-corporate policies”. Workers argue that the NDA government has been indifferent to their demands for higher wages. Transport services were disrupted across the country and state-run banks and insurance companies were left shut due to the strike. 

“In view of the utterly unresponsive and undemocratic attitude of the government, the CTUs view the announcements made by the Committee of Ministers as an eyewash and have decided to go ahead with the strike,” according to a joint statement released by the unions. “Meagre raise in minimum wage to Rs 9,100 per month in the central sphere is not binding on the states.” In a bid to prevent the strike earlier this week, the Centre announced that it had accepted an advisory board’s recommendations and hiked the minimum wage for semi-skilled non-agricultural workers to Rs 350 a day from Rs 246. This comes to a monthly minimum wage of Rs 9,100. But this offer was unacceptable to the trade unions. There are three primary reasons why the Centre’s offer was rejected.

Union leaders argue that the Centre’s announcement will only be applicable to those employed in the non-agricultural sector in job categories which it has the power to fix wages. Under the Minimum Wages Act, the Centre has the power to fix wages in just 48 job categories, compared to 1,679 under State governments. Union leaders argue that only about 70 lakh workers out of 46 crores, or approximately 1.5 percent of the working population, will be able to avail of the Centre’s "largesse". 

In light of rising prices of essential items, many workers argue that a mere monthly wage of Rs 9,100 will not suffice. The demand is for Rs 18,000 per month, which union leaders argue is at par with the Central Pay Commission’s recommendations. Moreover, the trade unions have demanded that national minimum wage floor set by the Centre should be made legally binding on all state governments.  

The second reason pertains to delays in the payment of bonus. During its announcement earlier this week, the Centre declared an amendment to the Payment of Bonus Act, which raises the ceiling on bonuses to Rs 7000 from Rs 3500.  Based on the revised norms, the Centre promised to pay bonus for the last two financial years. Despite the announcement, union leaders argue that the Centre has failed to notify and implement the amendment. 

Finally, CTUs have demanded that the Centre has failed to fully extend social security benefits to workers in the unorganised sector through Provident Fund and Employees’ State Insurance. On the question of minimum wage, economists argue that nobody really knows how increasing it triggers other economic dynamics in the long run. Is there an objective criterion to fix the minimum wage? It is still more of a political issue than economic. In an interesting aside, the Rashtriya Swayamasewak Sangh-affiliated Bharatiya Mazdoor Sangh withdrew from the agitation, even though it had placed similar demands.