The government sought technical assistance from ILO to create a framework for living wage

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Posted 05 Apr 2024

2 min read

Presently, India follows the minimum wage, which has remained stagnant since 2017.
The Code on Wages passed (2019), proposed a universal wage floor which shall apply to all states once implemented.

Issues with the present system
- The Minimum Wages Act, 1948 provides guidelines but does not specify the minimum wage.
- Fixing minimum wages in some jobs falls under both the Minimum Wages Act, 1948, and the Contract Labour (Regulation and Abolition) Act, 1970, leading to potential confusion.
- Wage payment discrepancies due to the lack of enforceability of the national wage floor across states.
- Gender disparity as scheduled employment with more women workers has lower minimum wages than those with more men.

Differential Aspects	Living Wage	Minimum Wage
Definition	The wage level necessary to afford a decent standard of living for workers and their families.	The lowest legal hourly wage that employers must pay their workers.
Aim	To improve workers' quality of life	To protect workers from exploitation.

Advantages of Living Wage:
- Accelerate Poverty alleviation efforts, aligning with Sustainable Development Goals (SDGs).
- Addresses wage insufficiency, especially considering inflation, and fosters a more equitable and sustainable economy.

Challenges of Living Wage:
- Implementing a national living wage framework across states due to the diversity of living costs in different regions of India.
- Financial strain especially for small businesses and MSMEs, due to increased labour costs.