Minimised by the law

"Har haath ko kaam do, kaam ka poora daam do" "Give work to every hand and the full wages for all work" - This is the slogan of the Right to Work campaign. The first half of this slogan has now become a partial, even if unsatisfactory reality with the Lok Sabha passing the National Rural Employment Guarantee Act. But what about the second half of the slogan? It appears that another long struggle is due before "full wages for all work" can become a reality. But while the demand for full and fair wages for work remains unfulfilled, the guarantee of employment promised by the first half of the slogan will leave the glass half-empty.

In our "global" cities such as Bangalore, which are being show-cased as the new faces of an affluent and vibrant India, it is now quite common to find thousands of citizens who keep expensive restaurants and clothes retailers in good business. Their incomes certainly permit such a lifestyle, but what of the others, especially those who must rely on manual labour for their own livelihoods? Unorganised workers, who make it possible for these few to lead a life of ease, do not seem to have a share in this good life. The housemaids, security guards, drivers and many others who perform their jobs around the same affluent class have a very different story to tell. Their incomes have not grown at the staggering rate of their employers; indeed adjusted for inflation their incomes have often fallen over the last two decades, driving them into deeper poverty.

Insufficient protection under law

The Minimum Wages Act (MWA) was passed in 1948 to protect workers in 'sweated' occupations from exploitation and deprivation. But the MWA sadly - and oddly - contains no definition of a minimum wage, and prescribes no criteria for the fixation thereof. Minimum wages are hence determined in a laborious, long drawn out, sector-by-sector and case-by-case basis by State-level Minimum Wages Advisory Boards according to their own discretion. Though Labour Ministers have been expressing since decades, at every Parliamentary session, the need to amend the MWA to remove these inadequacies, these have remained mere ritualistic platitudes. Hence, 58 years after the MWA was passed, minimum wages in States vary from as low as Rs. 25 in Nagaland to Rs. 134 in Kerala, according to the Parliamentary Committee which was set up to look into the National Rural Employment Guarantee Bill last year. At such abysmally low rates, workers can work all 365 days in the year, receive state-fixed minimum wages, and still be poor!

Karnataka, for instance, has fixed only Rs.1600 per month for an eight-hour day of domestic work; there is thus no assurance of 'living' wages here, although the state is regarded as a pioneer for even having taken this small step! Contract municipal sweepers' wages have been fixed Rs.1800 per month. The daily wages for agricultural work were fixed at Rs.56.30 up to March 2004. Yet again, a notification published in January 2005 says, "The wages for employees under special employment schemes for weaker sections in rural areas shall not be less than Rs.30.50 per day for eight hours of work".

These are considered good enough wages for these workers. Their contribution to the GDP, and hence to nation building, is also determined at these rates, and therefore made to appear trivial when compared to the value placed on the work of those in sectors such as Information Technology or Biotechnology.

Such low wage rates show that States have ignored the injunction of Articles 223 to 228 of the International Labour Organisation Code, as well as a directive of our own Constitution contained in Article 43 which states that, "The State shall endeavour to secure by suitable legislation or economic organisation or in any other way to all workers, agricultural, industrial or otherwise, work, a living wage (emphasis added) conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities". States have also brushed aside the five norms for fixing minimum wages which were evolved by the 15th Indian Labour Conference in 1957 - that minimum wages should be high enough to meet all basic needs of a worker's family, including food, clothing, shelter and amenities. The 15th ILC said that in calculating the minimum wage:

• the standard working class family of husband, wife and two children should be taken as three consumption units for one earner (husband: one unit, wife: 0.8 unit and two children: 0.6 units each; this norm, however, has been criticised by experts who point out that a spouse is not just 0.8 units and a standard family is not just "one spouse and two children". Especially in the Indian context, there are elderly parents and more than two children whom an earner has to usually support.)

• minimum food requirement should be calculated on the basis of 2,700 calories per day per consumption unit (as recommended by Dr. Aykroyd for an average Indian adult of moderate activity);

• clothing requirement to be based on per capita consumption of 18 yards per annum, which gives 72 yards per annum for the average worker's family;

• for housing, the rent corresponding to the minimum area provided for under the government's industrial housing schemes should be taken; and

• fuel, lighting and other items of expenditure should constitute 20 per cent of the total minimum wage.

Court interventions to no avail

The Supreme Court fully upheld these criteria in the case of Unichoy vs State of Kerala in 1961. In the later Reptakos Brett Vs Workmen case in 1991, the SC went one step further, and held that besides the five components enunciated by the 15th ILC, minimum wages should include a sixth component, amounting to 25% of the total minimum wage, to cover children's education, medical treatment, recreation, festivals and ceremonies. The SC also observed that a wage structure including the above six components would be 'nothing more than minimum wage at subsistence level' which the workers must get 'at all times and under all circumstances'.

And yet, one Joint Labour Commissioner of Karnataka once called the SC directives mere 'guidelines' that are not binding on the State and also admitted that no criteria were followed by the State while fixing minimum wages. Another Joint Labour Commissioner of Karnataka revealed that the consumption needs of an individual workman only were taken into consideration while fixing minimum wages, since "the wife and children of most unorganised workers work anyway" and taking three consumption units per worker as the basis for fixing wages would result in these families earning "too much". He appeared quite unmindful of the reasons why women and children ended up working in the first place.

The SC on various occasions has further amplified the need for payment of minimum wages (presumably at the minimum subsistence level) by stating that the minimum wage "sets the lowest limit below which the wages cannot be allowed to sink in all humanity"; that it has to be paid irrespective of the kind of enterprise, the extent of profits and financial condition of the enterprise; or the availability of workmen at lower wages; that non-payment of minimum wages amounts to "forced labour" under Article 23, and that an employer has no right to conduct his enterprise if he cannot pay his employee a minimum subsistence wage.

Several attempts have been made over the decades to work out the minimum wage as per the criteria laid down by the 15th ILC. The Karnataka Labour Department, in one such exercise in 1981, found that such a wage amounted to Rs.9.50 per adult per day and Rs. 28.40 for a standard family of three consumption units per earner at 1981 prices. But at the time of actually setting the wages, the Karnataka government ignored its own findings and fixed the lowest minimum at Rs.7.30 per day which was not sufficient even to meet the needs of a single adult, let alone a standard family. Even the highest wage fixed was not enough to meet the needs of a standard family of three consumption units. The Centre for Indian Trade Unions (CITU) – Karnataka calculated the minimum wage as per the 15th ILC norms to be Rs.90 per day at 1995 prices. The National Centre for Labour (NCL) in a major campaign for need-based minimum wages as per the 15th ILC norms found this amount to be Rs.125 at 1996 prices, which is roughly Rs.215 per day at today's prices (cumulative inflation since 1996 has been 72% approximately, according to the Ministry of Statistics).

A troubling aspect about the fixation of minimum wages by the Advisory Boards is that many wages are not linked to the payment of dearness allowance so that the real wages of workers keep eroding due to inflation. Another inadequacy is that though the MWA requires wages to be revised every five years, this rarely happens and there are instances of wages not being revised for more than 20 years. The MWA also has a clause which states that if wages are not revised, the existing wages should continue. This has only led to greater lethargy on the part of labour departments and lesser justice to workers. To overcome these lacunae, the National Commission on Rural Labour in 1990 hence recommended that the MWA should be amended to compel timely revision of wages, that all wages should be linked to VDA and ensure automatic enhancement of wages every six months on the basis of the Consumer Price Index. But this amendment has remained an unfulfilled dream for workers.

Even when inflation is considered, there is the additional risk that it may not be considered correctly. The variable dearness allowance (VDA) to be paid to workers in Karnataka is to be calculated at the rate of 3 paise per CPI point per day. By this measure, 1996 wages of Rs.125 a day would only rise to about Rs.170 today, whereas total inflation over this period has been 72%, and Rs.215 a day is the correct equivalent figure (to Rs.125 in 1996).

Further, different wages are fixed for the same work in different sectors. For instance, a peon in the metal-rolling industry may be fixed higher or lower wages than a peon in the plastic industry or in a shop or commercial establishment though a peon's job will be the same wherever he may work. To overcome these deficiencies to some extent, several northern states have done away with the time-consuming system of notifying wages individually for various industries which is failing to provide timely justice to workers. They have instead rationalised all the different occupation categories into just four: unskilled, semi-skilled, skilled and highly-skilled. Only one notification applicable to all industries needs to be issued as per this system. Yet this rational system has not been universalised, which would have provided timely succour to workers.

Well below true costs of living

A survey done as recently as June 2005 by the Stree Jagruti Samiti of Bangalore illustrates how inadequate government-fixed minimum wages are in this country even today. Geeta Menon of Stree Jagruti Samiti, which is organising domestic workers in Bangalore, says, "The problem is that the minimum wages fixed by the government and paid by employers are not high enough to cover food, leave, housing, medical expenses and educational needs". It found that the average expenditure per month of a domestic worker's family living in a slum was Rs.5189 (Rs.173 per day) of which Rs.1959 (Rs.65 per day) was for food, Rs.1221 for school fees, Rs.817 for repayment of loans, Rs.555 for rent, Rs.293 for health care, Rs.279 for electricity, Rs.185 for transport, Rs.54 for water and Rs.62 for other miscellaneous expenditure. The minimum wage of Rs.1600 (Rs.53 per day) fixed by the government was insufficient even to cover the food needs of the average family, leave alone other needs.

According to the study, domestic workers, nearly all of whom are women and children (7-16 years), are contributing, at a very minimum, Rs. 467 million per month to the economy, even at the existing value placed on their work, and without their services many employers would not be able to take up their well-paying jobs. And yet, the survey found that a typical employer earning several tens of thousands of rupees per month gets by paying just 1% of his/her earnings for domestic help.

"Even after working for eight hours a day every day with no day off, no holiday or no sick pay, a domestic worker can bring in just over a third of average family expenditure, if she is paid the government-fixed minimum wage," says Geeta Menon. But since this too is rarely paid, her earnings actually cover about a quarter of the family's expenditure needs. The survey found that two-thirds of families hence have three or more earners to support the basic needs of the family, usually consisting of six family members. However, the average total stated family income per month, despite taking the earnings of all members into account, was still only Rs. 4267; a shortfall of over Rs.900 per month over the expenditure.

"We can only assume that this shortfall between expenditure and family income is made up through child labour, prostitution and criminal activity," says the Stree Jagruti Samithi. The shortfall could also be covered through additional loans. 80% of loans were found to be for consumption, i.e., health and education, and not for investment. The plight of other unorganised workers is not very different. Despite this, and although the SC had stated that a single earner should be able to support a family comprising spouse and two children, the domestic workers of Stree Jagruthi Samiti are currently content to demand an increase in the minimum wage from 1,600 to only Rs. 2600 per month (50% of actual need). Says Geeta Menon, "they are magnanimous enough to say, 'It is good enough if a family is able to run on the wages of two earners'".