A large share of women are wage workers, particularly in casual labour and also in piece-rated wages in subcontracted activities or at public works sites. Here are some actionable suggestions to improve the life and working conditions of such women workers:

National minimum wage

It is generally believed that all wageworkers in India are covered under the Minimum Wages Act, 1948. However, this act covers only those employed under a list of identified industry/occupation groups included in a Schedule of Employment. These schedules of employment are decided separately by the Union government and each state government. They are likely to legally cover only a fraction of the workforce in the non-agricultural sectors, and with poor implementation of the act, an even smaller fraction of this set would be effectively covered.

This is reflected in the rather stark estimate of the National Commission for Enterprises in the Unorganised Sector (NCEUS) that about 40-50 per cent of male casual workers and more than 80 per cent of female casual workers received wages below minimum wage norms defined by the commission. If one were to consider a higher national minimum wage of Rs 66, an even higher proportion of workers fell below the norm.

A national minimum wage (NMW) for all employments not included in the Employment Schedules of the Minimum Wages Act was a recommendation of the NCEUS. Both wageworkers and homeworkers, dependent contractors who work on contracts from home, need to be covered by this NMW. The NMW should be set through a tripartite consultative process, with unions/ associations, employers/contractors and the government, based on the minimum basic needs of wageworkers and homeworkers and his/her families. The significance of this policy suggestion is its all-inclusive nature, which covers homeworkers.

The state or government can be committed to efficiency or to equity. The assumption of the tripartite bargaining process is that the state is committed to efficiency and not equity. A state committed to efficiency is also not in favour of regulations such as minimum wage because it can cause rent-seeking behaviour among the enforcement officials.

The importance of this NMW suggested by the commission is less about the level of the wage (which may or may not reduce overall employment), but more about the inclusiveness of the policy. Thus, if enforcement is inadequate, as it increasingly is, the NMW should be viewed as a positive and effective bargaining tool provided to the trade unions and associations representing various segments of wageworkers and homeworkers.

Further, the NMW, if reasonably implemented, can be seen as a forced sharing of benefits of economic growth. It will help boost incomes and purchasing power among workers. This is particularly essential in a period of declining economic growth, such as we are facing in India today, mainly due to poor demand in the economy leading to a weak investment climate.

Valuation of skills

Another concern of gender activists has been that the wages of employments where women workers are predominant are either not included in the Schedule of Minimum Wages or are valued as unskilled work and hence are at a lower minimum wage. While this is rather difficult to prove, the NCEUS adopted an approach of studying certain industry groups where women were in large proportions, such as the textile, garment and medical industry, and noted, “In the occupations related to the textile industry, we see clearly that the jobs of supervisors and machine operators are male-dominated, while the preparatory work of making fibre and yarn, spinning and winding is dominated by women. In the garment industry, women tailors are not too few, but it is the kind of garments they stitch that makes the difference in valuation. Sewing and embroidery work are clearly dominated by women.”

The minimum wages if fixed would either ignore the preparatory work of women or give a lower value to the manual skills of sewing and embroidery, where in fact the skill is gained through long years of experience. This is true of other trades such as agriculture where there would be no minimum wage fixed for weeding, which is predominantly done by women.

While minimum wages are set by committees that periodically review existing norms, the uniqueness of this recommendation is that it explicitly takes into consideration the gender dimension of the sexual division of labour and its implications for remuneration to women. These, together with the inclusion of homeworkers, again predominantly women, in the NMW are unique, gender-sensitive recommendations. If implemented, it would help boost work participation of discouraged women workers, who may enter the labour market if the new wage rate is higher than their reservation wage.

Incentivised demand-driven approach to skill training

Skill training is equally important for wageworkers and we propose an incentivised demand-driven policy approach to skill training. Some suggestions for implementing this approach are:

  • Create an incentive system for skill training in technical educational institutions that are able to find jobs and place their trainees and students.
  • Create incentives for firms to invest in their workers’ training. On-the-job training is a major method engaged by formal and informal enterprises to train their employees. The idea is to rejuvenate the old apprentice scheme of the Government of India, which was meant for the public sector, in a privatised form.
  • Incentivise educational institutions and enterprises that maintain diversity of students and employees. Gender, social and economic diversity will benefit enterprises, institutions and the country, and drive up participation rates of women.

We argue that if students and workers see the benefits of education and skill training, they would be willing to invest in themselves. Further, if most enterprises see the benefits of conducting training for their employees, there will be no poaching across enterprises. The enterprises will be able to reap the benefits of their investment and would be willing to undertake on-the- job training activities. Such a demand-driven incentive structure can replace the current supply-driven approach to training and help to reduce the skill mismatch. It will improve employability of workers in small, medium and large enterprises. Of course, all this is based on the premise that there will be high economic growth, which will create an increasing demand for workers. Increased government spending on vocational and skill training would help boost women’s work participation.

As discussed earlier, dependent contractors include old-style job works, or piece-rated work conducted at home (homeworkers) or in an enterprise. It also includes the new form of hiring through the platform economy, or the gig economy. Here we present a couple of suggestions for both types of workers.

Wages for homeworkers

Minimum wage recommendations do not preclude the fixation of minimum wages for the piece-rated work often undertaken by homeworkers. However, homeworkers bear a number of “hidden costs” which are not considered while fixing the minimum piece-rate wages. Homeworkers incur costs of the use of infrastructure, or they have to pay for non-wage costs of production, such as workplace, equipment and utilities such as electricity and water.

The employers or contractors of homeworkers also use various strategies to increase their profits, such as delayed or deferred payments and rejection of pieces of a product on the ground of poor quality. If these workers are part of a value chain of production, the cost of downswings in market demand are often downloaded on to these workers, through non-payment for completed products and rejection of products on the pretext of poor quality.

The NCEUS recommended that the wages of a non-agricultural worker working on piece-rate for eight hours should at least be equal to the time-rated minimum wages fixed for that category of work in the state. The wage payment period cannot exceed one month, and any delay beyond this will require the employer to pay penal rates of interest.

Further, there shall be no deduction from the wages or payment to workers and homeworkers, including if an advance was paid to the worker, or basic amenities such as accommodation provided to seasonal migrant workers. And finally, in recognition of the direct costs of use of infrastructure such as own tools, equipment, or use of part of own dwelling, the value of such contributions would be ascertained by the employer and added to the wages paid to the worker.

Reviving Jobs: An Agenda For Growth

Excerpted with permission from “Boosting Women’s Work Participation in India”, by Jeemol Unni, from Reviving Jobs: An Agenda For Growth, edited by Santosh Mehrotra, part of the Rethinking India series, Vintage Books.