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India to Replace Minimum Wage to Living Wage by 2025

Utkarsh Classes 27-03-2024
India to Replace Minimum Wage to Living Wage by 2025 Economy 4 min read

The Indian Government is planning to replace the minimum wage with a living wage by 2025 with technical support from the International Labour Organization (ILO). 

  • They have approached the ILO for support in capacity building, data collection, and demonstrating the positive economic impacts of living wages. 
  • India, being a founding member of ILO since 1922, is committed to fulfilling sustainable development goals by 2030. The replacement from a minimum to a living wage is a strategy to boost poverty alleviation efforts.
  • The Labour Secretary, Sumita Dawra, has stressed the importance of factors such as education, health, and standard of living along with defining living wages for developing nations. 
  • This aligns with India's national poverty assessment, which utilizes multidimensional indicators. The Wage Code, passed in 2019 but pending implementation, proposes a universal wage ceiling applicable to all states when implemented.

What is the living wage?

The Indian Government is taking steps towards implementing a living wage system by 2025, with technical assistance from the International Labour Organization (ILO). 

  • In order to achieve this goal, the government has requested the ILO's support in areas such as capacity building, data collection, and promoting the positive economic impact of living wages. 
  • As a founding member of the ILO since 1922, India is committed to achieving sustainable development goals by 2030. Transitioning from minimum to living wages is seen as a vital strategy in accelerating poverty alleviation efforts.

What is minimum wage?

Employers must pay their employees a minimum wage that cannot be decreased by any contract, whether collective or individual. This wage is defined as the smallest amount of money that a worker must receive for the work performed during a given period.

About ILO

In 1919, the Treaty of Versailles marked the birth of the International Labour Organization (ILO), founded on the principle that social justice is essential for achieving universal and lasting peace. 

  • The Constitution of the ILO was crafted by the Labour Commission, led by Samuel Gompers of the American Federation of Labour (AFL), and representatives from nine countries, including Belgium, Cuba, Czechoslovakia, France, Italy, Japan, Poland, the United Kingdom, and the United States. 
  • The ILO's first Director was Albert Thomas of France, who oversaw the organization's move to Geneva in 1920. 
  • In 1946, the ILO became a specialized agency of the newly formed United Nations, and in 1969, it was awarded the Nobel Peace Prize for promoting fraternity and peace among nations, advancing fair work practices and workers' rights, and providing technical assistance to developing nations.

FAQ

Answer: 2025

Answer: 2019

Answer: Treaty of Versailles
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