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Issues in Wage System PDF

The document discusses issues related to wage policy in India's informal sector. It notes that 93% of India's workforce is informal. Key issues include a lack of uniform norms for fixing minimum wages, exclusion of many activities from coverage, poor enforcement due to lack of awareness, infrequent implementation updates, and a gender pay gap partly due to market imperfections. It concludes that while organized sector wages are somewhat protected, most informal workers remain neglected under the current system.

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Kranthi Kodali
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77 views10 pages

Issues in Wage System PDF

The document discusses issues related to wage policy in India's informal sector. It notes that 93% of India's workforce is informal. Key issues include a lack of uniform norms for fixing minimum wages, exclusion of many activities from coverage, poor enforcement due to lack of awareness, infrequent implementation updates, and a gender pay gap partly due to market imperfections. It concludes that while organized sector wages are somewhat protected, most informal workers remain neglected under the current system.

Uploaded by

Kranthi Kodali
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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INTRODUCTION

● In India 93% of the total workforce work in the informal sector.


● The workers in informal sector, work in different employments such as :
(i) contract labour
(ii) construction worker
(iii) casual labour
(iv) workers in small units -handloom, power-loom, beedi making, etc.
(v) sweepers and scavengers
(vi) employees in shops
(vii) workers in agriculture
Issues in Wage Policy
In industries, wage system is associated with number of
issues. Some of the issues are :
a. Norms for fixing minimum wages
b. Coverage
c. Enforcement
d. Implementation
e. Gender gap
a. Norms for fixing minimum wages
● The Act does not set out a minimum wage in rupee terms but just
stipulates that the wage be a living wage which is to be decided by each
state.
● The machinery for fixation of minimum wages in India has not been
uniform.
● To overcome these deficiencies, several states have rationalised all the
different occupation categories into just four categories, that is, unskilled,
semi-skilled, skilled and highly-skilled.
b. Coverage

● In order to have minimum wage fixed, the employment or industrial


activity has to be included in the schedule of Employments.
● The criterion for inclusion in the list of scheduled employment is that
there should be at least 1000 workers engaged in that activity in the
state.
● Thus, many activities are excluded from the list.
c. Enforcement

● This is mainly due to lack of awareness amongst the workers


about minimum wage provisions and their entitlement under the
labour laws.
● This is particularly true in remote areas and in areas where
workers are not unionized or otherwise organised.
d. Implementation
● The main problem of minimum wage legislation in India is its poor
implementation.
● The Act empowers the appropriate government (Central, State or
Local) to fix a minimum wage for workers in unorganised sectors.
● In addition, minimum wage levels have been revised only at long
intervals.
● Such a failure in implementation of MWA is not only due to loopholes
in policy design but is also an outcome of lapses in the administration.
e. Gender gap

● Low incomes of women in informal wage employment appear to


be mainly due to low level of education.
● But much of the gender disparity in incomes among women
wage workers is explained by imperfections in the labor market.
Conclusion
●

● A meaningful wage policy has to include besides a minimum wage fixed at a


reasonable level, provision for assured employment for a minimum number of days.
(employment guarantee scheme).
● Globalisation and informalisation of the workers, a mere national floor level of
wages is not sufficient to protect all the workers.
● While the existing legal provision enables the government to protect organised
sector wages with periodic revisions, the unorganised workers remain largely
neglected.

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