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The distribution of wealth has seen the highest disparity all over the world during the last few decades.According to the Azim Premji University Centre for Sustainable Development’s ‘State of Working India-2019’ report, more than 57% of India’s regular wage earners have been earning less than Rs 10,000 per month. About 59.3% of causal workers are getting wages less than Rs 5,000 per month. While unemployment is being considered as the biggest problem, the dismal income rates of the employed should also be acause of concern. The Indian government has announcedthe Code on Wages Act (CWA) 2019 to propose a minimum wage rate. While most states are deliberating over its implementation, Kerala has implemented it for varioussectors. According to a Kerala government source, the state wants to implement it for all sectors by 2021.

The Code on Wages Act (CWA) 2019

The Code on Wages, 2019, was introduced in the LokSabha on July 23, 2019. It replaced four previous laws, namely, the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.

Elamaram Kareem, Member of Rajya Sabha and a CPI(M) leader from Kerala, informed BE, “The Seventh Pay Commission recommended the government to execute a minimum Rs 18,000 per month wage for last grade government employees. Also, in the 45th Indian Labour Conference, the minimum daily wage of `600 was proposed where thecentral government suggested a daily wage that is lowerthan ` 500. The central government has planned theminimum wage enactment in a phased, region wise manner. Apart from the National Capital Region (NCR) area, other regions are yet to be notified.” Pointing to an intrinsicweakness in the new legislation on wages, Kareem added,“The code states that it is not mandatory for the state governments to practice it. This provision might curtail the scope of implementation and delay the minimum wage execution procedure nationwide.”

Kerala gives hope

Government data informs that in India, 93% of the total 475 million labour market workers are employed in the unorganised sector where around 82% of the workers do not have written and permanent contract with their employers.

What makes Kerala stand out is its governmental provisions. Kareem stated, “To offer a decent wage to the labourersof all sectors, the Kerala government has initiated the‘Income Support Scheme’. If a small scale manufacturer cannot offer wages to its labours for a fund crunch or due to business loss, the state government helps the company financially to fulfill its payments.”

R. Ramakumar, Professor, Centre for Study of Developing Economies, Tata Institute of Social Sciences, told BE, “Historically, the problem of rural India is its overall low wage rate. Additionally, for a similar kind of a job, female workers are paid 50% lower than their male counterparts. The government of Kerala is planning to implement this minimum wages legislation along with an equal emphasis on equal wage payments to male and female workers for similar work.”

Kerala, while acting as a pioneer in ensuring minimum wages, is also creating a positive example for other states in India. Ramakumar added, “Nobody ever offered minimum wage in a platter to the labourers. They had to demand for it. In case of Kerala, the scenario has been different because of active political labour organisations - even in the agricultural sector. Apart from this, historically, Kerala has a high proportion of educated population. Traditionally, there has been resistance to work with poor wages in manual laborious jobs. Additionally, a large number of the population had started to migrate to West Asia and to other Indian states and the state faced a deficit of labour in rural areas. This also acted as a major factor behind the rise of the wage rate in Kerala. Later, attracted by this increased wage rate, many workers from Bengal, Assam and Odisha moved to the state in search of work and higher wages.  But even after that, the state’s wage rate did not fall.”

Apart from announcing a minimum wage rate for manual labourers, the government of Kerala announced minimum wage rates for the service sector, which includes nurses and government school teachers.