India set to transition from minimum wage to living wage by 2025
India is set to substitute the minimum wage with a living wage by 2025 and has requested technical support from the International Labour Organization (ILO) to establish a structure for calculating and implementing these changes, as reported by The Economic Times on March 25, 2024.
A living wage refers to the lowest income required for a worker to cover essential expenses, including housing, food, healthcare, education, and clothing, considering significant social expenditures by the individual.
The ILO formally endorsed the living wages during its 350th Session of the Governing Body held in Geneva, which concluded on March 14.
It is expected that, within a year, living wages would exceed basic minimum wages.
Minimum Wage in India:
- India has over 500 million workers, with 90% of them employed in the unorganized sector.
- Many of these workers currently receive a daily minimum wage of ₹176 (US$2.11) or more, depending on the state of employment.
- This national minimum wage level is not mandatory for states to adhere to and has remained unchanged since 2017, resulting in some states paying even lower wages.
- In 2019, the Code on Wages, ratified in 2019 but yet to be implemented, proposed a uniform minimum wage that would be binding on all states once the Code comes into effect.
Additional Information:
- India has been a member of the ILO since its inception in 1922, holding a permanent seat on its governing body.
- New Delhi aims to achieve the Sustainable Development Goals (SDGs) by 2030.
- Efforts have been made to collaborate with the ILO to enhance capacity, collect systemic data, and demonstrate the positive economic impact of implementing living wages.
