{"id":51209,"date":"2019-08-13T19:00:20","date_gmt":"2019-08-13T13:30:20","guid":{"rendered":"https:\/\/blogadmin.forumias.com\/?p=51209"},"modified":"2019-08-13T16:44:34","modified_gmt":"2019-08-13T11:14:34","slug":"7-pm-why-minimum-wage-wont-fix-indias-woes-13th-august-2019","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/7-pm-why-minimum-wage-wont-fix-indias-woes-13th-august-2019\/","title":{"rendered":"7 PM | Why minimum wage won\u2019t fix India\u2019s woes | 13th August, 2019"},"content":{"rendered":"\n<p><strong>Context:<\/strong> Minimum\nWages in India and its challenges<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The Code on Wages, 2019\nwas introduced in Lok Sabha on July 23, 2019. It seeks to regulate wage and\nbonus payments in all employments where any industry, trade, business, or\nmanufacture is carried out.&nbsp;<\/li><li>The Code replaces the\nfollowing four laws: (I) the Payment of Wages Act, 1936, (II) the Minimum Wages\nAct, 1948, (III) the Payment of Bonus Act, 1965, and (IV) the Equal\nRemuneration Act, 1976.<\/li><\/ul>\n\n\n\n<p><strong>Provisions of Wages bill 2019:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Coverage:<\/strong>&nbsp;The Code\nwill apply to all employees.&nbsp; The central government will make\nwage-related decisions for employments such as railways, mines, and oil fields,\namong others.&nbsp; State governments will make decisions for all other\nemployments.<\/li><li><strong>Floor wage:<\/strong>&nbsp;According\nto the Code, the central government will fix a floor wage, taking into account\nliving standards of workers.&nbsp; Further, it may set different floor wages\nfor different geographical areas.&nbsp; Before fixing the floor wage, the\ncentral government may obtain the advice of the Central Advisory Board and may\nconsult with state governments. &nbsp;&nbsp;<\/li><li><strong>Fixing the minimum wage:<\/strong>&nbsp;The\nCode prohibits employers from paying wages less than the minimum wages.&nbsp;\nMinimum wages will be notified by the central or state governments.&nbsp; This\nwill be based on time, or number of pieces produced.&nbsp; <\/li><li>The minimum wages will\nbe revised and reviewed by the central or state governments at an interval of\nnot more than five years.&nbsp; While fixing minimum wages, the central or\nstate governments may take into account factors such as: (I) skill of workers,\nand (II) difficulty of work.&nbsp;<\/li><li><strong>Overtime:<\/strong>&nbsp;The\ncentral or state government may fix the number of hours that constitute a\nnormal working day.&nbsp; In case employees work in excess of a normal working\nday, they will be entitled to overtime wage, which must be at least twice the\nnormal rate of wages.&nbsp;&nbsp;<\/li><li><strong>Gender discrimination:<\/strong>&nbsp;The\nCode prohibits gender discrimination in matters related to wages and\nrecruitment of employees for the same work or work of similar nature.&nbsp;\nWork of similar nature is defined as work for which the skill, effort,\nexperience, and responsibility required are the same.&nbsp;<\/li><li><strong>Advisory boards:<\/strong>&nbsp;The\ncentral and state governments will constitute advisory boards.&nbsp; The\nCentral Advisory Board will consist of: (I) employers, (II) employees (in equal\nnumber as employers), (III) independent persons, and (IV) five representatives\nof state governments.&nbsp; State Advisory Boards will consist of employers,\nemployees, and independent persons.&nbsp;<\/li><li>Further, one-third of\nthe total members on both the central and state Boards will be women.&nbsp; The\nBoards will advise the respective governments on various issues including: (I)\nfixation of minimum wages, and (II) increasing employment opportunities for\nwomen.<\/li><\/ul>\n\n\n\n<p><strong>Challenges to code on Wages bill:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Low minimum wage:<\/strong>\nThe&nbsp;Code on Wages Bill, 2019&nbsp;mandating a minimum wage across the\ncountry, law mandates a universal minimum payment of&nbsp;\u20b9178\na day. The wage prescribed is less than half the&nbsp;\u20b9375\na day recommended by a high-powered labor ministry panel. It is also miles away\nfrom the&nbsp;\u20b9700 fair wage that the&nbsp;7th\nCentral Pay Commission&nbsp;had arrived at.<\/li><li><strong>Compliance problems:<\/strong>\nIn India, small and unorganized businesses employ more than 90% of the\nworkforce, an estimated 500 million people. The new law seeks to cover all\nemployees. This is where the major problem with compliance will come up,\nleading to the threat of harassment from labor officials.<\/li><li><strong>Self employed:<\/strong> The second\nquirk of what\u2019s about to unfold is that 50% of the workforce is self-employed.\nNearly 30% work on a causal basis, approaching the labor market in bursts and\nspurts. The new code therefore will actually only work for 20% of the total\nworkforce.<\/li><li>Even within this, more\nthan half belong to very small enterprises that hire between one and five\npeople. Making these tiny enterprises comply with new laws is, in any case, a\ntall order.<\/li><li><strong>Complexity:<\/strong> the newly proposed\ncode will result in the setting up of more industries, and the creation of more\njobs, but a centralized code is extremely unlikely to reduce complexity and\nalmost certainly is counterproductive to bringing transparency or accountability\ninto the system.<\/li><li><strong>More goals:<\/strong> The new code seeks to\nachieve a large number of objectives. The basic premise in public policy\nsetting is that an instrument must have one clear goal. If it has more than\none, it would not achieve any.<\/li><li><strong>Lack of clarity:<\/strong> We still don\u2019t know what the\nprimary objective of code is. If we want to increase minimum wages and creating\nemployment. The conflict here is built in: one\ncomes at the cost of the other. It is clearly a lurking danger that higher\nwages will almost necessarily result in fewer jobs.<\/li><\/ul>\n\n\n\n<p><strong>Way forward: <\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The code\nis unfortunately being seen as a silver bullet for a slew of challenges faced\nby labor. It will increase disposable income, say some, while others argue that\nhumane working conditions will emerge and employers will also implement\nregulated working hours, pay for overtime, and will result in reducing worker\nexploitation. <\/li><li>Another\nmajor selling point of this code has been that it will also ensure the end to\ngender discrimination in wage payments. Again, it is the GST that this code\nreminds us of. A well-intentioned and brave step but rendered ineffective\nthrough multiple, vague, and lofty goals.<\/li><\/ul>\n\n\n\n<p>Source: <a href=\"https:\/\/www.livemint.com\/news\/india\/why-minimum-wage-won-t-fix-india-s-woes-1565619815429.html\">https:\/\/www.livemint.com\/news\/india\/why-minimum-wage-won-t-fix-india-s-woes-1565619815429.html<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Context: Minimum Wages in India and its challenges The Code on Wages, 2019 was introduced in Lok Sabha on July 23, 2019. It seeks to regulate wage and bonus payments in all employments where any industry, trade, business, or manufacture is carried out.&nbsp; The Code replaces the following four laws: (I) the Payment of Wages&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/7-pm-why-minimum-wage-wont-fix-indias-woes-13th-august-2019\/\">Continue reading <span class=\"screen-reader-text\">7 PM | Why minimum wage won\u2019t fix India\u2019s woes | 13th August, 2019<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":49370,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[130,9],"tags":[],"class_list":["post-51209","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-7-pm","category-public","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2019\/07\/7-PM.png?fit=1000%2C500&ssl=1","views":{"total":0,"cached_at":"","cached_date":1704846326},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/51209","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=51209"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/51209\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/49370"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=51209"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=51209"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=51209"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}