April 20, 2024

Lukmaan IAS

A Blog for IAS Examination

DECLINING EARNINGS AMONG SALARIED AND SELF-EMPLOYED INDIANS

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TAG: GS 3: ECONOMY

THE CONTEXT: The recent report India Employment Report 2024 released by the International Labour Organization (ILO) and the Institute for Human Development (IHD) sheds light on the concerning trend of declining real earnings among regular salaried and self-employed individuals in India.

EXPLANATION:

  • This analysis delves into the implications of this trend and explores the underlying factors contributing to it.

Highlights of the report:

  • The report indicates a decade-long decline in the real earnings of both regular salaried workers and self-employed individuals in India.
  • While the real monthly earnings of casual workers have shown an increase, the situation remains grim for salaried and self-employed segments.
  • For regular salaried workers, the average monthly real earnings have experienced an annual decline of 1.2% from 2012 to 2019 and 0.7% as of 2022.
  • Similarly, self-employed individuals have witnessed a decline of 0.8% annually from 2019 to 2022.
  • The declining real earnings highlight poor quality of employment generation in India between 2000 and 2022.
  • This trend signifies broader challenges within the labor market and underscores the need for comprehensive policy interventions.
  • The report also assesses whether employed individuals receive the minimum wage as prescribed by the Ministry of Labour and Employment.
  • Shockingly, a significant percentage of both regular and casual workers across sectors did not receive the average daily minimum wage prescribed for unskilled workers.
  • In the agriculture sector, 40.8% of regular workers and 51.9% of casual workers fell short of receiving the prescribed minimum wage.
  • In the construction sector, 39.3% of regular workers and a staggering 69.5% of casual workers did not receive the minimum wage.
  • Several factors could contribute to the decline in real earnings, including stagnant wage growth, inflationary pressures, structural changes in the economy, and disparities in skill development and education.
  • Addressing the issue of declining real earnings requires a multi-pronged approach, encompassing measures to enhance productivity, promote skill development, ensure compliance with minimum wage standards, and foster inclusive economic growth.

International Labour Organization (ILO):

  • The only tripartite U.N. agency, since 1919 the ILO brings together governments, employers and workers of 187 Member States, to set labour standards, develop policies and devise programmes promoting decent work for all women and men.
  • It was created in 1919, as part of the Treaty of Versailles that ended World War I, to reflect the belief that universal and lasting peace can be accomplished only if it is based on social justice.
  • The Constitution of the ILO was drafted in early 1919 by the Labour Commission
  • It became the first affiliated specialized agency of the United Nations in 1946.
  • Its headquarters is in Geneva, Switzerland
  • Its founding mission is “social justice is essential to universal and lasting peace”.
  • It promotes internationally recognized human and labour rights.
  • It received the Nobel Peace Prize in 1969.

SOURCE: https://www.downtoearth.org.in/news/governance/for-a-decade-earnings-of-regular-salaried-self-employed-indians-have-been-declining-ilo-95290

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