Dip in wages of informal workers: ILO

While the pandemic saw workers’ wages shrinking, informal workers in India experienced a sharper fall than formal workers, finds the International Labour Organisation. ILO also found that the gap between real and nominal minimum wages of unskilled workers in India has become significantly wider in the past 10 years.

Post-pandemic, formal workers’ wages have been cut by 3.6 per cent in India, while informal workers have experienced a much sharper fall in wages of 22.6 per cent, finds ILO’s Global Wage Report. Around two-thirds of countries whose short-term statistics are available showed decreasing wages or slower average wage growth.

In India, delayed increase or freeze in minimum wages because of the Covid-19 crisis have taken place at the local or sectoral level. For example, in the Punjab region, the local government reversed its order announcing a minimum wage increase, says the report.

Further, the report also found that the gap between real and nominal minimum wages of unskilled workers in India has significantly become wider in the past 10 years. Real wages have grown much lesser than nominal wages during the decade.

Both real and nominal national median daily wages of unskilled workers stood at Rs 79.5 in 2008. Since then, the rates have been growing differently over the decade. By 2015, the nominal wages grew to Rs 180.9, whereas real wages grew at Rs 104.5.

By 2019, this gap became wider. The nominal wages touched Rs 270, while the real wage was lagging behind at Rs 135.3. In the past one decade, nominal wages grew by 239.6 per cent, whereas real wages grew by only 70.2 per cent.

Minimum wage rates vary widely in the country and the variations across states in the number of wage rates indicates the high complexity of the minimum wage system.

Minimum wages of unskilled workers ranges between Rs 115 and Rs 538 across states. Rajasthan and Maharashtra are at the lower end of the range and Delhi and Karnataka at the upper end.