While lay-offs have become the norm especially in futuristic sectors like IT, the Union cabinet has cleared the labor code on minimum wages, creating a minimum wage barrier of Rs. 18,000/-
With the implementation of this bill, any state is bound by law to not pay a lesser amount. This translates to that the minimum wage for someone working in a metro city will be the same as that of a person in a small town. Likewise a B.com graduate and a 10 th pass delivery boy of an e-commerce company will get the same minimum wage at the entry level.
The economics of wages is largely dependent on demand and supply of talent and the cost of living. It is unfair to apply a universal minimum wage across different states with varying demographics.
The bill if passed in the parliament, will place considerable burden on the employers as they will not be able to pass on this sudden rise in cost to customers. This entry barrier will mean that both the businesses will not be able to mushroom or be competitive and it will be highly likely that these entry level jobs will move back to the informal sector.
Across sectors like automobile, construction and real estate, e-commerce, logistics, educational services, FMCG, FMCD, healthcare and pharma, hospitality, industrial manufacturing and allied sectors, media and entertainment and retail and telecom, a fixed salary could make companies more selective and even cause them to hire more interns than ever before.
At a time when formal job creation should be the only agenda that drives any labour reform in this country, the labor code could make industries automating at a faster rate thereby further impacting job creation.
The impact of this will be the highest at the entry level jobs because that is where the salary is less than Rs. 18,000/-.
Following are the jobs that are likely to get impacted and their current median salaries:
Automobile & Allied Industry Median Salary (per month)
Mechanic Rs.9,000 – Rs.12,000
Operator Rs.8,000 – Rs.10,000
Service Supervisor Rs.17,000 – Rs.22,000
Loader and Picker Rs.8,500 – Rs.10,000
Packing Assistant Rs.8,000 – Rs.10,000
Wireman Control Panel Rs.10,000 – Rs.12,000
Module Assembly Technician Rs.10,500 – Rs.12,500
Healthcare & Pharmaceuticals
Medical lab Technician Rs.12,500 – Rs.15,500
Diet Assistant Rs.7,500 – Rs.10,500
General Duty Assistant Rs.8,000 – Rs.10,000
Field Service Executive Rs.10,500 – Rs.12,500
Media & Entertainment
Cable Operator Rs.11,000 – Rs.13,000
Technician Rs.9,000 – Rs.11,000
Cable Boy Rs.7,000 – Rs.9,000
Admin Helper Rs.7,500 – Rs.9,500
Telephone Operator Rs.9,500 – Rs.11,500
Source: Team Lease Staffing Solutions