Officials sought ILO support in capacity building data collection, and demonstrating the positive economic impacts of living wages, according to the report.
India is preparing to shift from the minimum wage to living wage by 2025 with the help from the International Labour Organization (ILO) to create a framework for estimating and operationalising these wages, reported Economic Times.
Officials sought ILO support in capacity building data collection, and demonstrating the positive economic impacts of living wages, according to the report.
Let Us Take A Look At What Is Minimum Wage, Fair Wage And Living Wage?
What Is Minimum Wage?
Minimum wage means a lower base of compensation that an employer is supposed to pay the employee. Especially, when an amount to be paid on hourly basis is decided as a minimum wage, employers can not pay the amount below it.
In India, minimum wage changes from state to state and city to city. In some states it is Rs 22 per hour to Rs 50 per hour. Maharashtra has a basic minimum wage of Rs 62.87 for unskilled laborers as compared to Bihar which has the minimum wage at Rs 49.37 an hour.
India has its highest employment in the unorganised sector, who do not receive the minimum wage as decided by their respective states. There is no mechanism to find out how much wage is paid to them as they get paid in cash and there is no money trail to search like salaried employees paid in their bank account. Due to these reasons in many cases the conditions of a minimum wage are not met.
What Is Fair Wage?
Fair wage lies between the minimum wage and the living wage. It is above the minimum wage but still falls below what’s required for a living standard. The upper boundary of a fair wage is determined by the industry’s financial capability to compensate.
What Is Living Wage?
According to an ET Report, senior officials disclosed the living wage as a minimum income necessary for a worker to meet their basic needs, factoring in key social expenditure by an individual such as housing, food, healthcare, education and clothing – were endorsed by the ILO earlier this month. He added that these would be higher than basic minimum wages and said “We could go beyond minimum wages in a year.”
Living Wage, beyond the basic primary needs also gives the greater surety and security for the worker and their family. It includes social expenditures like housing, education, food, healthcare and clothing.