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Maximum denial

The Centre’s decision to hold back minimum wages amounts to reducing workers to forced labour, writes Harsh Mander.

india Updated: Jan 25, 2011 03:19 IST

‘The least that every worker in field and factory is entitled to is a minimum wage which will enable him to live in modest comfort, and humane hours of labour which do not break his strength or spirit...,’ Jawaharlal Nehru declared stirringly in his presidential address to Congress in Lahore in 1929. Eight decades later, the Union government of free India resolved that it would not pay the minimum wage established by law to workers in public works.

In 2009, the Centre froze wages for workers under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to R100 per day. As a result, with time, wages in many states fell below the minimum wages, aggravated further by rising food prices. This extraordinary decision, impacting critically on unorganised workers, was criticised. In response, the Centre agreed to index this wage to inflation, but remains unyielding about paying minimum wages.

The Indian republic has a long tradition of failing to implement those of its own laws that guarantee social, economic and redistributive justice. Land reforms and legal prohibitions on bonded labour, usury, manual scavenging, untouchability and domestic violence, as much as laws to secure worker protections, are all flouted with impunity. But the decision to withhold minimum wages in government works falls into a different category, because the State flouts one of the most fundamental legal protections of the impoverished worker.

The minimum wage ensu-res only bare subsistence, or in the words of the Supreme Court “it sets the lowest limits below which wages cannot be allowed to sink in all humanity”. It is much less than a “living wage”, which the Court decrees should be “sufficiently high to provide a standard family with food, shelter, clothing, medical care and education of children”, but also “a fair measure of frugal comfort to provide for old age and evil days”.

The Centre’s defence is that MGNREGA is not conventional employment, but more social security payments to unemployed persons. The Centre had resorted to a similar plea to deny minimum wages for famine relief works. Justice Bhagwati clarified: “It is not as if a dole or bounty is given by the State”, nor is their work “worthless or useless to the society”, any less eligible for minimum wages than other work.

The Centre also worries that minimum wages are fixed by states, and they may peg the rates at arbitrarily high levels in order to force higher subsidies from the Union exchequer. This can be remedied by amending the law to establish rational criteria for minimum wage fixation, and possibly empowering the Centre to fix minimum wages for MGNREGA; it could then limit its support to minimum wages fixed by it.

The argument is also made that higher wages to rural labour distort the market, and disadvantage the already hamstrung farmer by forcing a greater wage burden. A majority of small farmers depend only on family labour. Evidence is sometimes cited of reduced migration to Punjab of migrant workers from the Hindi rural hinterland – the proverbial bhaiyas – which has dented the financial viability of farmers. But wages form only less than 30% of farmer costs; they are much more burdened by other high inputs costs, such as seed, fertiliser and electricity. To the extent that farmers are indeed burdened, they should be compensated by the State rather than by depriving workers of survival wage.

The government must be a model employer, and to the extent it offers works at higher wages, it will push wages up even in private employment, because workers will have alternative recourse. Studies such as by Chandrashekhar and Jayati Ghosh establish that that MGNREGA has indeed pushed up wages for workers, even more so for women.

The Centre is primarily unwilling to pay even a bare subsistence wage to those who toil in public works, because of the burdens this would impose on the exchequer. But the Court as far back as 1967 enjoined that the minimum wage must “in any event be paid, irrespective of the extent of profits, the financial condition of the establishment or the availability of workmen on lower wages”. This surely applies at least as much to government as to a private employer. Whenever the government claims it does not have resources to invest for the poor, it is a cliché to contrast this selective tight-fistedness with lavish government expenses on its own salaries, on tax holidays for the private sector, on urban infrastructure and extravaganzas like the Commonwealth Games, and on defence. But like with many clichés, there is a great deal of truth in these contrasts. In any case, even if a resource constraint exists, can we therefore justify short-changing our poorest people from a subsistence wage?

In three independent judgements, the Court categorically decreed not only that the minimum wage is inviolable, but also that failing to pay it amounts to ‘forced labour’. It held that ‘force’ may also arise from ‘hunger and poverty, want and destitution’ which ‘leave no choice of alternatives to a person in want’. The government’s decision to withhold minimum wages amounts to reducing millions of workers to forced labour, which is barred by the Constitution.

For those who transact only the language of growth, more money in the hands of workers would mean more disposable income to spend, which would spur the stagnant rural economy. But like Nehru, we must above all recognise the ethical imperative of preserving the ‘strength and spirit’ of those who toil. This is a goal that the Indian republic should not jettison — not after so many years of hard-won freedom.

*Harsh Mander is Director, Centre for Equity Studies

**The views expressed by the author are personal