Time for common floor for minimum wages?
Minimum wages should be fixed for four categories — unskilled, semi-skilled, skilled and highly-skilled — based on geographical region, and should cover all workers, irrespective of wage ceiling, suggests the Economic Survey report.
It calls for a “simple, coherent and enforceable minimum wage system”. “An effective minimum wage policy is a potential tool not only for protection of low paid workers, but is also an inclusive mechanism for more resilient and sustainable economic development,” the survey says. Recommended By Colombia.
There are as many as 1,915 minimum wage levels now, in a complicated structure, defined for various job categories across states. One in every three wage workers in India is not protected by the minimum wage law, it points out.
The survey also called for setting a national floor level for minimum wages that can vary across five geographical regions. “Thereafter, states can fix the minimum wages, which shall not be less than the ‘floor wage’. This would bring uniformity in minimum wages across the country and make all states almost equally attractive from the point of view of labour cost for investment as well as reduce distress migration,” says the survey.
The survey sees the need for a mechanism to adjust minimum wages regularly and frequently, similar to countries like Montenegro, Netherlands, Uruguay, and Costa Rica where it is done every six months.