Monday, August 27, 2018

India's wage slavery

Low pay and wage inequality persist in India despite 7% annual average gross domestic product (GDP) growth over the past two decades, according to a new report by the International Labour Organization.

While real wages almost doubled over 18 years between 1993-94 and 2011-12, GDP grew four-fold.

“The Indian labour market remains characterized by high levels of segmentation and informality”, inhibiting India’s path to achieving decent working conditions and inclusive growth." said the India Wage Report.

“We are surprised that wage policy has not made, up to now, a great impact on low-wage earners,” Xavier Estupiñan, wage specialist at the International Labour Organization and one of authors of the report.

There appears to be a trend towards the casualisation of the workforce, the report stated. More casual and contractual jobs are being added to the organised sector but there has been a lack of substantial growth of regular jobs after 1991.

Up to 62% (121 million) of employed people in 2011-12 were casual workers, the last available data from the EUS show. Yet while employment in the organised sector has grown, many of these jobs are casual, informal and lack basic social security benefits. Wide disparities across gender, states and casual/salaried workers show a pervasively unequal employment landscape across the country. Women still earn, on average, 34% less than men (though down from 48% in 1993-94), and the daily wage of rural regular workers is, on average, 49% less than their urban counterparts.

While women’s daily wages may have increased more rapidly than men’s between 1993-94 and 2011-12, female workers are still paid lower wages than men in each employment category. At 34%, the gap is higher than the global average, estimated to be 23% in 2015, the report pointed out. The gender wage gap between men and women remains high even after higher education–a graduate woman is paid Rs 609, on average, across sectors while a man with a graduate or higher degree will earn Rs 805. If India discarded religious beliefs that perpetuate gender inequalities and caste discrimination, it could more than double its per capita GDP growth of the last 60 years in half the time.

Regular workers in urban areas earn an average of Rs 449 per day, 49% more than their peers in rural areas who take home Rs 300. Casual workers in rural areas earn the least at Rs 138; however, the gap between this group and regular workers is narrower than between those in urban centres (a Rs 33 difference, rather than Rs 149).

Though India was among the first developing countries to establish a Minimum Wages Act (1948), multiple issues restrict its ability to address poverty and inequality. Its complex nature (there are an estimated 1,709 different minimum wage rates across the country) and the fact that its legal application is limited to workers in ‘scheduled’ occupations–jobs classified by the government as most vulnerable to low wages and exploitation such as mill workers and miners–mean that its impact is “ineffective”, the report said. Minimum wage rates are set by state governments, and do not always reflect the cost of living. In 2013, agricultural labourers in Arunachal Pradesh were paid Rs 80 per day, Rs 126 in Orissa and Rs 269 in Karnataka, the report said. Furthermore, only 66% of workers are covered by the Minimum Wage Act. The remaining 34% not in “scheduled occupations” remain outside the scope of the minimum-wage law. A national minimum wage was introduced in 1991, but its application is not legally binding. In 2009, 15% of regular workers and 41% of casual workers earned less than this minimum daily wage, the report said.

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