3. provide a worker with physical subsistence,

3. S. Bhoothalingam Committee Report (1978).


1. Minimum Wage:The National Commission on Labour describes living wage as “a measure of frugal comfort including education of children, protection against ill health, requirements of essential social needs and some insurance against the more important misfortunes”.

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Thus according to this definition,’ living wage’ provides for a bare physical subsistence and the maintenance of health. On the other hand, ‘minimum wage’ includes not only living wage but also provides for some measure of education, medical requirements and amenities. In other words, “minimum wages” provide a worker with physical subsistence, maintenance of health, requirements of essential social needs and some measure of education for self and for children. The National Commission on Labour states “the first claim is of the worker for a basic minimum wage irrespective of any other consideration”. Thus, the minimum wage prescribes the lower limit; however, the upper limit will be set by the capacity of the industry to pay.

2. Fair Wage:The Committee on Fair Wages opined that while minimum wage prescribed the lower limit, the upper limit was set by the capacity of the industry to pay. Between these two limits, the actual wage would depend on 1. The productivity of labour. 2. The prevailing rate of wages. 3.

The level of national income and its distribution. 4. The place of industry in the economy of the country and 5. The degree of unionisation of labour in the industry. Thus, fair wage is something more than the minimum wages. It is the wage fixed after considering several factors such as wage rate prevailing in other industries in the location, similar industries, ability of the firm to pay wages etc. 3. Wages and Productivity:Wages should be linked to productivity because an industry’s capacity to pay would be determined by productivity.

Furthermore, a raise in productivity provides legitimacy to the claims of labour for a higher wage. Productivity is measured by VAM (value added by manufacture). VAM is not the result of the effort of labour alone. Along with labour; capital, technology and management also contribute towards productivity.

Therefore, it would be highly incorrect to credit the entire productivity with labour alone. The National Commission on Labour, disclosed that in the first decade of planning, labour did not benefit from the gains in productivity of the industry. However, in the next two decades, a part of the gains in productivity was shared by labour, though labour did not share it in a disproportionate manner.

Failure of the National Wage Policy:

Although several commissions have deliberated on the need for evolving a National Wage Policy, but so far there is not enough evidence towards its emergence.

There is all round failure in implementing minimum wages in the private sector. There still exist interindustry and inter-occupational differences in wages. Further, there is the failure to restrain the increase of wages and salaries in the public sector far in excess of the rise in consumer price index. Though, the National Wage Policy has failed on many counts, there is still a sufficient degree of consensus on the objectives of national wage policy.


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