Government is aiming to shift from minimum wage to living wage system by 2025 with the help of International Labour Organization (ILO). Let us understand more about this transition quickly.
The minimum wage is the lowest legal pay an employer can offer. It acts as a safety net, ensuring workers receive a basic amount for their labor. It prevents unfairly low wages and supports a minimum standard of living.
A living wage is the hourly pay someone needs to afford basic necessities like food, housing, and healthcare, without relying on government assistance. It considers local costs and aims for a decent, not just surviving, standard of living.
The shift from minimum wage to living wage is being done to pull out millions of workers in unorganised sectors from poverty and ensure that they are paid to meet their basic living expenses.
The current minimum wage rate in India is Rs. 178 (equivalent to US$2.15). That makes it around Rs. 5340 (approximately US$65) per month.
India soughts to seek assistance from ILO that includes data collection, evidence-based analysis, and possible positive impact of shift to living wage in India.
Although India aims to make this shift by 2025, but their are some challenges to overcome. Such as disparity in wage payments due to stagnant national wage floors since 2017 and pending implementation of Code on Wages.