2. Formulation of rational wage policy has always been one of the most
significant social /political concern
Mandated by the constitution of India
Wage policy refers to government legislation, actions and initiates to
regulate the level and structure of wages or both so as to attain the
economic and social objective.
Economic Objective: Economic welfare
Rising national Income
Equal distribution of National Income
Fair amount of stability in National Income increment
Full employment and optimum allocation of resources
The highest degree of economic stability consistent with an optimum
rate of economic progress.
3. Social objective
Elimination of exceptionally low wages
Establishment of fair labor standards
(no child labor, no forced labour, right to collectively
bargain, no discrimination)
Serve asToken of respect to employees
Protection of wage earners from the rising prices
The incentive for workers to increase their productive
performance
4. Keeping this in view, it is essential that wage policy
has to be interrelated with boarder economic
objective.The wage, which is the price of the labor,
should be in harmony with other prices in the
system. Hence it is necessary to maintain a balance
between the objectives of the economic policy and
principles of democratic system in the formulation
of wage policy.
5. Wages are generally compensation given to workers based
on hourly, daily, weekly basis. Salary is the compensation
given to office employees.Wages are given to Blue collar
workers, salary is given to white collar workers.
Wages are based on the number of units produced i.e. piece
wage system or the time wage system (time spent on the
job). But salary is always based on time spent on the job.
When it is difficult to judge the production or output of the
company then the compensation is paid in the form of salary.
6. Is based on the principle social justice.The
basic idea is he who works is entitled to a fair
minimum remuneration which may enable
him to live a life with human dignity
7. What Min wage Implies ??????????
Subsistence wage, fair wage, living wage
Min wage is a relative term
Whether min wage should be same for all the sectors all over the
country or
Should there be a sector al system of fixing min wage rate for different
sectors or industries or
Should it be a combination of both
What methods and machinery should be used for fixing Min wages –
Direct methods and indirect method
Direct methods-Fixation of minimum wage by statute, order,
regulation without consulting any parties, Fixation of minimum wages
on recommendation of wage boards, wage councils on which workers
and employer are equally represented, award of arbitration or
industrial court
Indirect method is through collective bargaining
Determination of criteria for fixing MW –need of the workers,
capacity of the industry to pay, wages paid for comparable work,
requirements of economic development.
8. Committee on fair wages(1948) and 15th
session of ILC(1957)propounded certain
wage concepts such as Min wage, fair wage,
living wage, Money wage, real wage
9. Minimum wages are those wages which are provided
not only for the bare sustenance of life but also for the
preservation of efficiency of the worker by providing
some measures of education, medical requirement and
amenities
Fair wage: For this lower limit is min wage and upper
limit is the capacity of the industry to pay
Actual wage falls between the min wage and fair wage
Depends on productivity of labour
Prevailing rates of wages in comparable occupations
Place of Industry in the economy
National Income and its distribution
10. Living wage represents a wage which
provides for a better standard of living not
merely for a bare physical sustenance but
decency, protection against ill-health,
requirement of essential social needs and to
save for old age. It’s a measure of self
sufficiency.
11. Nominal wage or money wage is the earnings
in cash or its equivalence
Real wage is the money wage – cost of living
index. Real wage denote the purchasing
power of wages.
National minimum wage concept: principle of
application of a “uniform minimum wage” for
the country as a whole. It is impractical and
not in the interest of workers.
