The reference to a “floor wage” instead of a “national minimum wage” in the Code on Wages Bill that the Centre introduced on Tuesday has economists and employee associations worried that the yet-unspecified minimum wage would be extremely low.
Under the bill, the Centre will fix a nationally binding floor wage while the states will remain free to fix their own “minimum wages” for various categories of work, provided these are not lower than the national floor wage.
However, a now-lapsed Code on Wages Bill that the government had introduced in August 2017 had mentioned a “national minimum wage” rather than a “floor wage”.
On Thursday, several labour economists suggested that the shift to the expression “floor wage” portended a vary low wage similar to the existing but non-binding “national minimum floor-level wage” that would deny the workers even a basic standard of living. This national minimum floor-level wage is Rs 176 a day.
Section 9 of the latest bill says: “The central government shall fix floor wage taking into account minimum living standards of a worker in such a manner as may be prescribed: provided that different floor wage may be fixed for different geographical regions.”
K.R. Shyam Sundar, a labour economist and a professor at the Xavier Labour Relations Institute, Jamshedpur, said the change in the wording appeared to indicate an intention to fix a bare minimum national wage.
“A ‘floor wage’ indicates the lowest possible wage. The ‘national minimum wage’ was supposed to ensure basic living standards for the worker, and to be close to the prevailing market wage rate,” he said.
The latest bill says the Centre will fix the floor wage after discussions with a Central Advisory Board, which will have representatives from the employers, employee unions and the state governments as well as independent members. The bill does not say what method would be used to work out a wage that would ensure the minimum living standard.
“The Central Advisory Board is not a body of experts, nor has any expert body been attached to it. How will it arrive at the wage?” Sundar said.
Labour minister Santosh Gangwar had recently said the minimum wage would be fixed at Rs 178 a day but the ministry later clarified he was referring to an updated national minimum floor-level wage rather than the Code on Wages bill.
A committee set up by the central government had studied various reports as well as data on consumption and expenditure patterns and suggested a national minimum wage of Rs 375 a day based on July 2018 prices. It also suggested an alternative regime of region-wise minimum wages ranging between Rs 342 and Rs 447.
The seventh pay commission had in 2016 recommended Rs 18,000 a month as the minimum wage for central government workers.
Another economist said: “The minimum wage should be proportionate to the level of development of the economy. Ideally it should not be above the per capita income. But it cannot be kept so low that the workers struggle to meet their basic needs of food, education, healthcare, transport and the like.”
Left trade unions have called for a nationwide protest against the bill on August 2.
“The BJP government, (which is) under absolute captivity of the private corporate lobby, could not dare to stand by even the recommendation of their own expert committee, comprising their chosen bureaucrats,” Tapan Sen, general secretary of CPM labour arm Citu, said in a statement.
“To ensure the ‘ease of loot by the employers’, this government can go to any extent to throw the workers and employees to sub-human living conditions.”
A civil society group too has opposed the bill since its proposed floor wage will not apply to the Mahatma Gandhi National Rural Employment Guarantee Act.
The NREGA Sangharsh Morcha said this means the scheme’s workers will continue to be exploited and forced to work for a pittance.