Minimum Wages

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Context
Minimum Wage Act adopted in 1948 is considered to be one of the most important pieces of labour
legislation.

The system of Minimum Wage Setting is complex: “appropriate government” sets minimum wages to
employees in some selected “employment schedules” (sectors/occupations).

In the present scenario, labour is under the concurrent list of the constitution. The centre as well as
the states fix minimum wages for skilled, semi-skilled and unskilled workers in their jurisdiction.

By 2005, we had 311 different employment schedules and 1171 different minimum wage rates in the
country.*

Such a system has resulted in a “plethora of statutory minimum wages which vary across jobs within
a state and across states in a same job” and is “indefensible”.

*Source: ILO Report

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Minimum Wages in News..

Labour Ministry is mulling an amendment to Minimum Wage Act to fix a mandatory minimum level of
wages applicable across the country for all categories of workers, which will be aligned with inflation
and sufficiency to create demand for goods and services.

In Sep 2015, 10 central trade unions had called for a general strike to protest against labour ministry
document circulated amongst the trade unions days before the strike, which argued that by current
norms, prices and calorific needs, Rs.6330 per month is the monthly wage adequate for an unskilled
worker with a wife and two small children.

The trade unions and various other federations that represent 15 Cr workers had demanded
Rs.15,000 per month minimum wage as a national level floor wage. Striking a generous posture, the
government modestly increased its proposal to Rs.7098 per month.

*Source: ILO Report

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Key Trends
Over the period of last three years between 2013 to
2015, the Minimum Wages across major states in the Average % increase in the Minimum Wages
between 2013-15
country such as Delhi, Haryana, Punjab, Uttar Pradesh,
Maharashtra and Karnataka have increased at an Karnataka 24%

average rate of 31%.

Maharashtra 59%
The highest percentage increase during this period has
Uttar Pradesh 28%
been observed in the state of Maharashtra where the
Minimum Wages have increased by approximately Haryana 46%

60%, followed by Haryana, where the Wage Rates have

Delhi 14%
increased by an average rate of 46%.
0% 10% 20% 30% 40% 50% 60% 70%
The lowest minimum wage rate hike in the period is
observed for Delhi, where there was 14% increase in
the same time period.

The spike of increase is mainly observed between the

years 2013 and 2014.