‘Hiking minimum wages will only burden the industry, traders’

Minimum wages alone cannot address the myriad problems faced by the unorganised sector, which employs 87% of the India’s workforce, experts told The Sunday Guardian.
Reacting on the Delhi government’s latest bid to increase the minimum wages for unskilled, semi-skilled and skilled workers by 37%, trade unions have propounded that market and not the government should determine prices to ensure healthy wage to productivity ratio.

“Such schemes put pressure on the industry and traders. Everyone as such is putting in efforts to uptick the demands and profits and subsequently strengthening the economy and such schemes are discouraging,” said Atul Bhargava, secretary, New Delhi Trade Association.
Claiming it to be a “landmark decision”, the Delhi government has proposed to revise the minimum wages for unskilled, semi-skilled and skilled workers to Rs 13,350, Rs 14,698 and Rs 16,182 per month, respectively.
Critics have pointed out that given the dearth of jobs in the national capital and significantly lower wages in the neighbouring states like Rajasthan (Rs 5,486), Haryana (Rs 7,976), Punjab (Rs 7,221) and Uttar Pradesh (Rs 7,108), the move may be counter- productive.
“There is already great slump in the market due to cash crunch and this move will have adverse affect on the industry and with business preparing to accommodate GST, this move will further burden the industry resulting to job cuts. The industries move to sates with cheaper labor to consolidate their resources,” said Confederation of All India Traders (CAIT) secretary general Praveen Khandelwal.
Traders associations are further irked with the Delhi government for not giving representation to employers or traders on the committee set up to revise the minimum wages.
“How can you devise a holistic wage scheme without consulting the traders? There should be a middle path where neither the workers feel exploited nor the employers feel burdened,” added Kahdelwal.
Kahndelwal suggested that the government should devise a mechanism in consultation with trade unions where separate fund can be generated for the welfare of the labours.
Social experts believe that such schemes are purely populist. “Generally these are populist schemes. It is unclear whether minimum wage revisions will lead to better conditions of work and living, as several studies have found that minimum wage regulations are routinely flouted,” said Eesha Kunduri, research associate, Centre for Policy Research.
Experts told The Sunday Guardian that the weak enforcement of the law due to a corrupt and incompetent labour department is one of the major challenges that need to be addressed first.
“As  much as 86% of the labor force does not get the revised wages. The labor inspectors instead of enforcing law are more focused on filling up their pockets,” said Anurag Saxena, general secretary, Centre of Indian Trade Unions.
Experts believe that mandating pay parity between permanent and contract workers, proper registration of labours with the labor department and efficient implementation of existing schemes is the way out for the pressing issue of welfare of the informal and casual labours.
“There should be parity between the wages of contractual workers and the permanent workers coupled with stringent monitoring. Reach the beneficiaries to understand their needs and likewise devise a bottom-up approach,” said Akhilesh Tewari, a social scientist, working for labours rights of brick kiln workers in Fatehpur district of Uttar Pradesh.