India Shifts from Minimum Wage to Living Wage: Understanding the Implications

India Shifts from Minimum Wage to Living Wage: ILO is helping the Indian government develop a framework for estimating and implementing a living wage by 2025.

Moving from minimum wages to living wages will help millions get out of poverty.

Following a February Meeting of Experts on wage policies, the ILO's governing body endorsed the concept on March 13.

While Indian workers earn 176 bucks or more a day, the national wage floor isn't enforced across states, resulting in disparities.

The report says India has approached the ILO to help it develop a framework for assessing and implementing living wages.

What does it mean to have a living wage and a minimum wage?

According to the ILO, living wages are remuneration that allows workers and their families to afford a decent standard of living.

Living wages reduce poverty and ensure employees have enough money to live comfortably.

On the other hand, a minimum wage is the lowest amount required by law to be paid by employers to employees.

While implementing a national living wage framework across states with different living costs is a positive step, it's not without its challenges. Small and medium businesses, particularly, may have a hard time with the rise in labor costs.

The country can support higher wages due to its robust economic growth rate of 8.4%. The shift is also prompted by workers' concerns about the current minimum wage, which isn't enough to meet basic needs.

India's goal of replacing the minimum wage with a living wage by 2025 represents a big step toward improving Indian workers' lives.

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