Living Wage Reform Could Boost Women’s Workforce Participation in India

Living Wage Latest News

• A new report by Quess Corp and the Udaiti Foundation reveals that over half of blue- and grey-collar women workers in India are dissatisfied with their low wages, with 80% saving less than ₹2,000 per month. 
• These inadequate earnings are a key reason why many women leave formal employment, especially when weighed against the high opportunity costs of working. 
• The report highlights a significant gap between the minimum wage and the actual “living wage” needed to cover essential expenses like health and education. 
• Recognising this, the Labour Ministry is now considering the inclusion of these costs in wage standards to make formal work more viable for women.

Living Wages

• A living wage is the minimum income necessary for a worker to meet their basic needs such as food, housing, clothing, healthcare, education, and some level of financial security. 
• Unlike minimum wages, which are set by law and often do not account for actual living costs, living wages are calculated based on the cost of living in a specific region.
• Living wages ensure that workers and their families can live with dignity without falling into poverty.

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Low Pay and High Costs Forcing Women Out of Workforce

• A recent survey by Quess Corp reveals that blue- and grey-collar women workers earn only 70% of what their male counterparts make. 
  • Blue- and grey-collar women workers are women employed in roles traditionally considered manual labor or technical/skilled trades, respectively. 
  • Blue-collar work often involves physical labor, while grey-collar jobs require specialized skills and may involve a combination of physical and intellectual tasks. 
• Coupled with high opportunity costs such as unpaid caregiving, long commutes, and migration expenses, many women struggle to remain in formal employment. 
• The study highlights that women in peri-urban manufacturing zones often face lower minimum wages despite higher living costs. 
• Notably, one in five women earn less than ₹20,000 per month, the typical minimum wage in Tier 1 cities. 
• The data also shows that women earning above ₹20,000 are 21% less likely to exit the workforce soon, indicating that better pay significantly improves retention.

Government Explores Expanding Minimum Wage Definition to Support Women

• The government is considering broadening the definition of minimum wage to include expenses on health and education—currently excluded from wage calculations. 
• Presently, the minimum wage is based only on nutrition, housing, and clothing. 
• From a women’s perspective, including childcare and healthcare costs would help reduce the opportunity cost of working. 
• Experts acknowledged the challenge of implementing this in a diverse country like India, where conditions vary by state, and stressed the importance of initiating a social dialogue with both employers and employees. 
• While the move is still in early stages, she welcomed the fact that discussions have begun.

Beyond Wages: Structural Barriers Hindering Women’s Workforce Participation

• While implementing living wage standards would benefit all workers, the impact on women could be especially transformative due to their higher opportunity costs. 
• India’s female labour force participation rate (LFPR) remains low at 32%, compared to 77.1% for men, as per the June PLFS data. 
• Economists argue that raising women’s LFPR above 50% is essential for India to reach developed nation status. 
• However, women face multiple challenges beyond wages, including unsafe or unaffordable housing, poor work culture, limited mobility, and regulatory restrictions. 
• Experts noted that 54 existing laws restrict women’s employment, such as those banning night shifts. 
• While these are being gradually repealed, they highlighted that responsibility for women’s safety—especially during night shifts—then falls on employers, a burden more easily borne by large firms than small businesses. 
• Addressing these layered barriers is critical to enabling more women to join and remain in the workforce.

Manufacturing Hubs Boost Women’s Employment Opportunities

• States with strong industrial and manufacturing bases, such as Tamil Nadu, Karnataka, and Maharashtra, are leading in female workforce participation. 
• Modern electronics and auto manufacturing units in these states are increasingly employing women due to their skills in finger dexterity and hand-eye coordination—qualities that are tested and found more often in women. 
• As a result, sectors like electronics and automotive manufacturing are actively seeking female workers. 

Source: IE | IB