The Centre is ready to bite the bullet on labour reforms. One of the labour ministry’s proposals is to rationalize minimum wages in the country, with the Centre maintaining a statutory floor wage. Part of the Code on Wages Bill, 2019, it also recommends that state governments consider fixing minimum wages that vary based on skillsets and geographical location. That the law on this needs revision is not in doubt, but do we really need a multiplicity of figures that employers must pay at the very least?

Exploitative pay and wage inequality are genuine problems that need to be addressed, and it makes sense to prescribe a minimum sum below which no one should be made to work. For it to lift ill-educated workers with low bargaining power out of poverty, however, this figure needs to be well known across the country. It is for workers to demand what’s due to them, especially in the informal sector. Varied salaries that depend on other factors would be hard to recall. Worse, it would call for the fair identification of skillsets, which markets do better than bureaucratic systems. On past experience, more and more categories would probably mean that much more red tape.

For efficacy, it’s best to keep the idea simple. The International Labour Organisation recommends a single minimum wage for an entire country, a figure applicable to all employment. This is the model that’s likely to yield the outcomes that the government has in mind. Let’s not have an overly complex set of salary rules that both businesses and employees find perplexing to implement. It could prove counter-productive.

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