The abandoned vision of a National Floor Level Wage for India

THE TRIPARTITE COMMITTEE ON WAGES appointed in 1948 recommended a framework of three-layered wages — minimum wage at the bottom, living wages at the top and fair wages in between. 

“Living wage” was defined as the highest wage level that enables workers to provide for themselves and their families, and include not only the basic essentials of food, clothing and shelter, but also frugal comforts such as children’s education, health protection and essential social requirements. It also included some kind of insurance against contingencies like old age. While determining the living wage, economic conditions in the country and the capacity of the concerned industry to pay were also considered.  

In the case of fair wages, we should consider maintaining the same level of employment at that wage and if possible increasing employment. Then the wages should enable the industry to maintain production efficiency. The minimum wage must provide, not merely for the bare sustenance of life, but also for the preservation of the efficiency of the worker by providing for some measure of education, medical support and amenities. 

Minimum wages (‘MW’) are usually fixed for occupations in an industry where workers are not protected by collective bargaining or statutory backing in wage fixation. The Minimum Wages Act (‘MWA’) was enacted in 1946 and came into force in 1948.  As per the MWA, both Central and State Governments are appropriate Governments to fix, review and revise the MW of workers employed in the scheduled employments in their respective jurisdictions. Schedule-B of the Act  concerns minimum wages in the agricultural establishments and Schedule A, the non-agricultural establishments. The appropriate governments could add non-agricultural scheduled employment from time to time.  

MW comprises a basic wage rate (to be revised at least every five years) and cost of living allowance (‘COLA’), revised twice a year in consonance with the movements in the Consumer Price Index. In most states the COLA has been revised rather routinely and as a result MW increases; however, the gain is rather meagre for the workers. 

It is important to note that many state governments do not revise the basic rates of MW as provided for in the Act. In some states, even the Minimum Wages Advisory Boards are not regularly constituted and/or changed – according to the Act, the appropriate government needs to consult the Advisory Boards before fixing the minimum wage rates.  

The recommendations made in the 15th Indian Labour Conference (‘ILC’) in 1957 and the Supreme Court’s judgment in 1992 are considered as the ‘norms’ to determine MW.  

The ILC’s norms include: (i) three consumption units for one wage earner without incorporating the earnings of women, children and adolescents; (ii) a minimum food requirement of 2,700 calories per adult person per daily; (iii) clothing requirements at 72 yards per annum for an average working family of four; (iv) a house rent corresponding to the minimum area provided for under the Government's Industrial Housing Scheme; and (v) 20 per cent of total minimum wage for fuel, lighting and other miscellaneous items. 

The Supreme Court added the following components: children’s education, medical requirements, minimum recreation including festivals/ceremonies, and contingencies such as old age and marriage. The top Court also directed that these consumption items should constitute 25 per cent of the total minimum wage.