Living Wages in India: Reflections from an Expert Meeting organised by UN GCNI, WageIndicator Foundation, and FLAME University

The launch of the UN Global Compact’s Forward Faster initiative on September 18, 2023, marks a significant milestone in our united effort to expedite progress towards the SDGs. This date coincides with International Equal Pay Day, which highlights the ongoing struggle for equal pay for equal work. The initiative “Forward Faster 2030” revolves around those most crucial thematic areas which are seen to have a long-lasting impact on the fulfillment of the Sustainable Development Goals such as Climate Action, Water Resilience, Finance and Investment, Living Wage and Gender Equality.

In India, the local network is actively working towards contextualizing these goals in harmony with Indian national priorities to contribute significantly to the realization of this Agenda at the National scale. Living Wage is one of the five crucial themes of action under the United Nations Global Compact Forward Faster initiative to accelerate the 2030 SDG Agenda. This initiative aligns with the United Nations’ enduring commitment to human rights and its efforts to combat economic inequality, including ensuring decent work and economic growth for all workers.

To take this discourse further, recently UN Global Compact Network India (UN GCNI), WageIndicator Foundation, and FLAME University, organized a timely and crucial two-day expert meeting titled “Moving from Minimum Wage to Living Wage in India?”. This event delved into the multifaceted challenges and potential actionable strategies required for this significant shift by businesses, civil society, government bodies, UN organizations and academics.

Nestled amidst lush greenery, the university’s serene surroundings provided the perfect backdrop for two days of interactive dialogue, insightful engagement and collaboration.

What is a Living Wage?

LIVING WAGE is the remuneration received for a standard workweek by a worker in a particular place sufficient to afford a decent standard of living for the worker and her or his family^[1], as defined by the Global Living Wage Coalition (GLWC). Elements of a decent standard of living include food, water, housing, education, health care, transportation, clothing and other essential needs including provision for unexpected events. Responsibilities of States should be taken into consideration in the calculation of the living costs^[2].

According to the definition adopted by the ILO minimum wage is “the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract”^[3].

Living wages are recognized as a fundamental human right under the Universal Declaration of Human Rights. They are critical for ensuring that economic growth translates into real improvements in the quality of life and aligns with the Sustainable Development Goals (SDGs), particularly No Poverty, Decent Work and Economic Growth, Gender Equality, and Reduced Inequalities.

Context and Urgency

The transition from minimum wage to living wage is not just a theoretical exercise; it is a pressing issue for millions of workers across India. The transition from minimum wages to living wages is more than a necessary adjustment—it’s an urgent response to a growing crisis. Despite being employed, many workers in India still live in poverty because their wages fail to meet basic needs like food, housing, education, healthcare and access to the internet. This disparity is heightened by minimum wage laws that are often outdated, insufficient, or poorly enforced. Furthermore, the rising cost of living in various regions, driven by inflation and economic shifts, exacerbates the gap between minimum and living wages.

In India, a living wage is defined as the income necessary for a worker and their family to achieve a decent standard of living. This wide variation underscores the need for localized approaches to wage setting and enforcement.

Moving from Minimum Wage to Living Wage in India: Key Reflections from the Meeting

The expert meeting underscored the critical need to shift from minimum wages to living wages in India, emphasizing that this transition is not just a matter of increasing pay but ensuring workers can live with dignity and meet their basic needs. Here are some of my takeaways:

Complex Wage Systems: The current wage structures in India are complex and varied, making the transition to living wages challenging. The event highlighted the need for a standardized approach that accommodates regional and sectoral differences while aligning with international standards.
Role of Data and Methodology: Comprehensive data collection is crucial. Accurate living wage estimates that consider cost of living variations across regions can guide effective policy-making and wage-setting. Participating companies reflected on the need for developing a strong business case for living wage supported by evidence and transparent methodology.
Collaborative Efforts: The discussions emphasized the importance of collaboration between trade unions, companies, and government bodies. Engaging all stakeholders in dialogue and negotiations is key to establishing fair wage standards and addressing implementation challenges.
Corporate Commitment: Case studies from a select few businesses illustrated that while achieving living wages is feasible, it requires ongoing commitment, clear frameworks, and engagement with suppliers and contractors. Presenting companies showed that creating a business case and simplifying implementation processes are essential steps.
Labour Law Reforms: Reforming labor laws to address informal work and streamline wage structures was identified as necessary for achieving living wages. This includes improving enforcement and developing a standardized system for wage calculations.
Social Dialogue and Awareness: Raising awareness about living wages and educating both employers and workers on their benefits are critical. This involves not only public education but also embedding living wages into corporate practices and policy frameworks.
Actionable Next Steps: The second day focused on developing actionable strategies, including setting clear milestones, building public-private partnerships, and leveraging best practices from other countries. Establishing a legal framework and engaging in social dialogue are pivotal for successful implementation.

Conclusion: A Path Forward

The expert meeting at FLAME University provided a comprehensive exploration of the challenges and opportunities in moving from minimum to living wages in India. The event highlighted the complexity of the wage system and the need for detailed data, international alignment, and multi-stakeholder collaboration.

The insights gained over the two days underscore the importance of a consensus-driven approach to wage reform. As India navigates this transition, the lessons learned from both local and international experiences will be crucial in shaping a fair and dignified work environment for all workers. The call to action is clear: advancing living wages requires a concerted effort from businesses, governments, and civil society to create a more inclusive and equitable future.

As we move forward, the discussions and recommendations from this expert meeting will serve as a valuable guide for shaping the future of wage policies in India. The journey towards living wages is not just about improving income levels but also about enhancing the quality of life and fostering a more just society where all workers live with dignity.

—————————————————————————————————————————————————————————————————————————————————————————————————–

Take proactive steps and join the movement: Join the UNGC Forward Faster Initiative
Join UNGCNI now: https://globalcompact.in/participant-engagement/
Read more: https://unglobalcompact.org/what-is-gc/our-work/social/gender-equality
Explore the comprehensive guide: https://forwardfaster.unglobalcompact.org/living-wage

[1] https://www.globallivingwage.org/about/what-is-a-living-wage/
[2] https://globalcompact.in/living-wage-giving-workers-a-decent-standard-of-living/
[3] https://www.ilo.org/global/topics/wages/minimum-wages/definition/WCMS_439072/lang–en/index.htm#1