The aim of this paper is to figure out the problems faced by India and South Africa in establishing the concept of living wage. It tries to pin point the challenges and their efforts to combat the situation. It seeks to analyse the right of a person to have the basic necessities of life to be fulfilled. This is the responsibility of the employer to pay its workers fairly and adequately. It brings about the governmental steps and far they have achieved their goal.

Abstract

Labour reforms are required because of complex and multiple laws governing labour in India. Therefore it restricts the ease of doing business. In India, labour is a subject provided under concurrent list which means that both the State and the Centre can make laws in this respect. It is the duty of the State to ensure minimum wages for workers. The Act of minimum wage 1948 is comprehensive legislation which sets out the rights of the worker and be protected from the evils prevailing in our society. They have a right to be paid at a level which can ensure their subsistence and fulfilling their basic needs rather than being exploited. The act deal with the three concepts in respect to wages that are:-minimum wage, fair wage and living wage. India recognizes the concept of minimum wages but yet it is far from the concept of living wage. It’s the constitutional duty of the State provided under Article 43 to provide living wages. That is the reason a step has been taken and the Wages Bill is being proposed. It proposes a national living wage for different geographical regions. And state should not fix the minimum wage less than that fixed by the Centre. Living wage includes meeting the unforeseen liabilities or saving for old age. The major reason behind that is the abundant labour available and ready to work at a rate below the minimum wage. 45% of our population is working below the minimum wage rate. Under MGNREGA the minimum wage given to a worker is Rs 176 in spite of the recommendation made by Labour Ministry to provide Rs 375. The composition of the employees as organized, unorganized, skilled and unskilled also hampers the workers growth and forces them to work at such rate. Whereas South Africa recognizes the concept of living wage and pays its worker accordingly. As we know no country is perfect and same is the case with South Africa. They have massive unemployment and inequality. The major population that is unemployed is women. The National Minimum Wages Act 2019 is enacted in this respect although is not altogether a conclusive plan but a plan if its implemented effectively it can prove a positive sign for the country. South Africa faces 51% unemployment as per the population. Even ILO believes that evidence based process should be there. The living wage has been nowhere defined but it means that a wage of a worker should be able to cover his basic expenses and he should be able to support his household. In South Africa, the concept of social wage is emerging. COSATU and the Advisory Panel has made certain observations and shared their viewpoints on the subject.  

The paper basically deals with the comparative analysis of living wage in the two countries that is in South Africa and India and how are they dealing with their prevailing conditions. And this code on wage bill along with other codes on safety, social security and industrial relations are a step towards reforms in India.

Introduction

Labour legislation in India have emerged a long time back when the interdependence to the British economy was present. This has been a major reason for the coming up of legislation in relation to labour. The workers being unorganised and being in a large population has lead to their exploitation at a significant level. This exploitation when reached to a level where it became unbearable lead to the emergence of the concept to what we call today as collective bargaining. Various laws emerged to protect the rights and interests of these workers. 

We do need to keep in mind that the labour as subject falls under the concurrent list of our country’s constitution. This simply implies that both the centre and the state have a right to make laws with respect to labour. Both have the power to enact legislation. This sometimes may lead to chaos and confusion as there are subject to multi jurisdictional regulation. Overlapping of laws passed by such governments may create a negative impact in the country.

A very comprehensive legislation was passed in the year 1948 namely, Minimum wages act.1948 which solely aims to ensure that a worker is paid a wage which covers his basic expenses and livelihood I.e. he is provided at least a minimum level of wage. Minimum wages act has emerged and hold a spot tightly in current times as it protected the workers and their interests.

Minimum Wages Act, 1948

The Act provided the basic definition of who is a worker, what all elements must be present when computing wage of a worker. It defined the methodology for how is to be determined. The act lays down the three concepts with respect to wages that is it defines three kinds of wages namely, minimum wage, fair wage and living wage. The minimum wage as we have already discussed is a wage that covers a. Workers basic amenities of life such as water, clothing, food, etc. Fair wages is above the minimum wage and covers some more expenses. It considers the employers paying capacity and also the nature of work done by the employee. Living wages are goals to achieve.

The minimum wages are fixed through methods laid down in section 5 of the Act. This involves the committee method and the notification method. Any of them might be opted. No stringent rules in this regard have been laid down. Various factors are to be considered while fixing a minimum level of wage. It depends upon the price of essential commodities, productivity and local conditions. Other factors might also be considered. It varies from state to state.  The Act makes laws with respect to scheduled employments only. There may be as many committees and sub- committees as may be deemed fit doe the purpose. Fixation of the minimum wage and revision of the minimum wage define their purpose. It may review it after the period of 5 years. They are appointed by the appropriate government; the aim is to bring uniformity in different scheduled employments. Other method involves the publication of a notification in the official gazette. The people affected by such publication may file any objections within a specified period of time.

In minimum wage the employer’s capacity to pay is not even a consideration. Employers are bound to pay a minimum wage. Above minimum wage and the fair wage lies the living wage. It is an amount that is paid to a worker so that he can live a luxurious life and standard of living. He can actually save for unforeseen liabilities and keep for old age, etc 

The Global Living Wage Coalition defines the living wage as the remuneration received for a standard workweek by a worker in a particular place sufficient to afford a decent standard of living  for the worker and his/her family. Elements of a decent standard of living includes food, water, housing, education, healthcare, transportation, clothing and other essential needs including provision for unexpected events. 

Origin and Constitutional Validity of Minimum Wages Act

The concept of minimum wage has been long struggling that is since 80 years. It took place first time in US. There are still many people who are not aware about this concept and prolong to be exploited. Whether the concept is in the benefit of the workers or not has been debate happening since. Some believe that it will give rise to the rate of unemployment in the country as it will lead to destruction of jobs whereas others believe it is not so. A scheme was also proposed where low skilled workers should be hired by providing work subsidies. Therefore, the Act has been enacted and the Indian Government has been taking steps for its compliance. This is also mandated by the Constitution of India as it clearly states in Article 43 of the constitution I.e. the Directive Principles of State Policy.  It says that the living wage should be provided to all the workers whether they belong to any sector of work. A decent standard of living should be provided to them. They are entitled to all kinds of opportunities. Laws should be enacted to ensure this rule. Article 39 also provides for the same. There are 

Numerous reasons why all this has not been complied with.

Code of Wages Bill

The code proposes numerous objectives. It tries to fix the woes there currently present in the four other acts namely:-

• Payment of Wages Act, 1936
• Minimum Wages Act, 1948
• Payment of Bonus Act, 1965
• Equal Remuneration Act, 1976

It tries to consolidate them at one place. The intention behind the code is still ambiguous as the benefit accrued by it is at the cost of some other benefit. Firstly, the unorganised sector of workers will become a hindrance. The new code though provides to cover all the workers, but there is a chance of them being exploited. The newly emerged concept of GST will ensure huge amount of costs. 

Major population is self-employed. Employment terms and remuneration will thus be affected. The code asserts that there will be more employment opportunities and this will lead to creation of more jobs. But this is a dream far yet to be achieved. We fail when it comes to the implementation of the same. It provides and removes the multiple definition and complexities present today but what are the results not yet confirmed.

In order to achieve everything. One might not achieve anything. Fixing of floor wage by the Centre and then making a rule that it might differ as per the geographical location creates a confusion. Also, the challenges that are faced by the Bill are troublesome. It might increase employment, it might not. What if the rise in the wages leads to less employment? The bill is well guided but what if it remains ineffective with the setup of falsehood goals.

The code of wages bill lays down the appointment of inspector cum facilitator for the compliance of the rules laid down in the Code. It also lays down the rule of penalty for non-compliance. Any one in contravention might be imposed with imprisonment for 3 months and/or a fine of up to Rs1, 00,000. Complaints can be filed by a worker himself, or through a lawyer, or a registered trade union. 

Then proposed has not seen any developments since the six months of its passing as there are other more important challenges that are faced by the country both athletes micro and the macro level. 

Why the bill cannot be implemented?

A national living wage is implemented as it may lead to a disastrous situation. The living standards vary from city to city and region to region. The government needs to take steps to cop up with the inflation and the minimum wage of the people.

A reference that is required for the employers to know the rate of wages they provide, a living wage calculator helps them in this regard. It calculates the rate of minimum wage and the cost of loving among carious states. The technology has been emphasised by the MIT in 2004.

No employer can succeed in the long run if his employees remain unhappy and do not contribute to full of their capacities. A happy employee would work whole heartedly and will to be an asset in the future,

There is a gender disparity that prevails across many states in India. The rate of unemployment among women is more than that of men. The wages that are pad to women are approx less than 45% that men are provided with.

The new Bill of Code of wages proposes the minimum wage to be Rs 178 per day. Although this amount is far away from the recommended amount of Rs 375 per day. This recommendation was made by the Labour Ministry. The 7th Central pay Commission suggested that fair wage should be Rs 700. This was to apply universally, but the implementation of such laws is a major obstacle, in pantries, a joke of Rs 2 was made, this was to be imposed strictly. The bill created a lot of disappointment around. The bill asserts to solve the problems of gender disparity and the informal sectors. Problem of casual workers was also to be considered. 

The national floor wage was decided to be Rs. 176 that was set in 2017. It was now that it was hiked by Rs. 2 I.e. to Rs 178 which led to an outrage. National floor wage was suggested to remove all he variations among different states. The recommendation by the ILO and the expert committee arrived at different conclusions with respect to the calories diet consumption in a. Family. The former suggested 2700 calories while the latter suggested 2400. The decision was based on the consumption patterns and the reduced drudgery of work. 

The international Labour organisation makes recommendation to the effect in current times depending upon the nature of various industries that a working class family on a daily basis would spend 2700 on calories of food per person, 72 yards of clothes, minimum house rent and education, light and fuel as prescribed. Though the committee makes a departure from this point of view.

Relevant Case Laws

The rule of minimum was laid down in the cases of Sanjit Roy vs. State of Rajasthan an also in PUDR vs. UOI where it was held that the workers that are paid below the rate of minimum wage will violate Article 23 of the Constitution of India and will be considered in the category of forced labour.

Position in South Africa

No country can achieve it all. No country is perfect. There are problems faced by them and through rigorous practice they can come with a solution. Like South Africa, the concept of living wage is present. But this was not the case few years ago. They faced serious problems with respect of fixing of wages. But through collective wage agreements they came with a solution to their problem.

The major employment that is a part of South Africa involves domestic workers.  The wages or salary of such workers is decided by asking the person living next door what are they paying. There are no specific criteria for it. Domestic workers means people involved in jobs like cleaning, baby sitting, etc. ILO says that the population involved in domestic work is the entire population of South Africa. The workers remain underpaid and exploited. The level of unemployment is also high in the country. People either they do not work or they work for less. The inequality amount the workers is a major rationale for the problems that are associated with the country. They also face racial segregation. 

Some Illustrations

There was a lady named Primrose, who being a domestic worker was suffering with her life. She was paid r4000/- per month a 4 members in her family to feed to. Her major expenses involved the amount spent on groceries for her children and grandchildren. She was underpaid and she was crying out loud. She being single had to look after everything alone. She said she would have been a social worker if not a domestic worker and help people. She wants provide good education to her children. But will she be able to do so?

Another lady named Justine was unable to bear the cost of living and her children. Though she has been able to find work with very much difficulty as a domestic worker, she is facing a lot. She complains about the life she has been living in South Africa. She was aware of her right to appeal.

She has suffered warfare and has been urging for safety, health and education for her children. 

These two cases mark the life of people living in South Africa. There are many other instances also. Firstly, it is difficult to find a job in South Africa. Those who are fortunate enough to find a job face challenges with the amount of salary paid to them. Multi-Sectoral companies in South Africa have been employing less amount of workforce and paying them at the level below the minimum level. 

National Minimum Wage Act

In Jan 2019, National Minimum Wage Act was finally introduced in South Africa. The major goals that South Africa aims to fulfil are to provide employment and reduce inequality and thus reducing poverty. South Africa faces a 27% rate of unemployment in the country. The minimum wage that is fixed is r20/ per hour which when calculated leads to R3500/per week. They work for 40 hrs in a week. The rule is however subject to certain exceptions. That is it does not apply to the defence forces, Intelligence Agency and also secret service employees. Imposition of fines is there when non-compliance or rules are not adhered to. The power of review can be exercised every year. They are either fixed through collective bargaining process or directly through the government.   

Role played by Labour Institutions

COSATU and the federation of union of South Africa are the major labour institutions and they have given their full approval National Minimum Wage Act. They realise the benefits that will accrue from it. Another labour institution (SAFTU) HAS CRITICISED IT AS IT IS. It does emphasise on the concept of living wage. The President supports and called it as a great victory. He said that it is a measure in order to reduce the inequality and poverty. SAFTU. Has taken this war to the court. It marks that it is a “missed opportunity”. The president though says that it is a step in progress. The other Bill with respect to Basic Condition of Employment Amendment Bill and the Labour Relation Agreements Bill are still in process. The country is on its way to solve its problems and the government has already starting taking steps and an initiative for the same. Living wage is far but least minimum wage will combat the situation in the country.

Position in Other Countries

Coming to the point where other countries have accepted and implemented the concept of living wage effectively. They do understand the need of the workers to pay rightly so that they can ensure their subsistence level and live above that they can cover their all kinds of expenses and also save for unforeseen liabilities. For example, in US the concept is very well recognised and it was first recognised into city of Baltimore. They did understand the contribution made by their workers and the implementation of wage ordinances took place. As of now, more than 140 American municipalities recognise the living wage laws.  In New Zealand also, the concept was launched in 2012 in the cities of Auckland and Wellington. A dignified life should be lived by the workers is the viewpoint took by them. In UK, wide implementation of living wage was emphasised first time emerging in London. These countries are a fruitful example that the living wage is significant and every worker should be ensured for the same. To contrasting approach adopted by the Australian country which implies that living wage discourse has not really taken root there. It is because of the high end in National Minimum Wage and collective bargaining mechanisms that are rousting. Therefore the National Minimum Wage calculation is guided by a lot of factors. This involves institutional as well as political factors. Everything needs to be considered while deriving a conclusion as to what should be the National Minimum Wage. Living wage is important as it ensure a decent standard of living for a worker.

Comparative Analysis

As we notice the position in other countries let us now consider the position in India and South Africa which is our main concern. Both the countries are far away from the concept of living wage. India whereas at least recognises the concept of minimum wage, South Africa is still in process for that. Conditions prevailing in South Africa are much worse than in India. The rate of unemployment and inequality are important considerable points in this regard. South Africa has a proposed a Bill for the working conditions and labour relations. Lack of political will is present in both the countries. India at least recognises the bare subsistence level that should be paid to a worker whereas in South Africa this just happened a year ago. Both the countries are far away from providing living wage to a worker. South Africa needs stringent steps. COSATU. And other labour institutions should emphasise more on the implementation of the legislation enacted. National Minimum Wage is set but should be implemented too. Both the countries face gender disparity. Both involve unorganised and the informal sector of workman. South Africa has a huge population of domestic workers. The government can make a commendable change and reduce poverty. The rate of employment will definitely increase. The recommendations made by the ILO and the labour ministry should be emphasised as they are huge powered panels. All things should be kept in mind and both these countries India and South Africa are a long way to go and need resources to achieve their desired goals or the goals that are yet to be achieved.

Conclusion

Dealt with various issues faced by both the countries, we derive that only stringent policies for the implementation of these proposed bills can ensure the smooth functioning of the wage system. India and South Africa, the development is majorly dependent upon these policies and their implementation. The government can only improve the conditions prevailing in these countries. The rights of the workers and their interests need to be protected as is emphases by the constitutions itself. Employment and creating of healthy working environment is a basic goal to achieve and if this is achieved more creation of job opportunities will happened and poverty thus will be reduced. The nature of jobs should also be improved. Employers should understand the workers needs and necessities and should accordingly provide for minimum wage, a worker is entitled to live a dignified life and therefore should be provided with it. Various labour institutions can that play a major role in the country can help achieve the desired goals. The factors that are considered while arriving at a minimum wage should also be emphasised. The basic point that is to be understood is the role of government in all of it how it can play a significant role.  The way it deals with the concept of minimum wage and living wage. The effective implementation can lead to achievement of much higher goals. The government needs to stand up just like in recent times and ensure the efficient working of the wage system while keeping in mind the interests of the workers. 

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