Last month a trending news on media highlighted that Mukesh
Ambani, chairman of Reliance Group, has not got any salary hike in past one
decade. He is drawing the same salary since the global financial crisis.
Incidentally, he is not alone in her suffering. The rickshaw
pullers who transport me to and from metro station have also not hiked their
per trip charge for past one decade. Porters in Sadar Bazaar, the wholesale
market of Delhi, who carry heavy stuff on their head or back, have also hardly
got any raise in past one decade. My banker friends are also complaining that
they never got the pre global financial crisis level bonus again. The
recruiters are happy to claim that they are able to recruit an average fresh management
graduate, engineer, CA or lawyer almost at almost the same initial salary as
2008.
Last year The 'State of Working India' report published by Azim
Premji University highlighted that despite economic growth and gradual
formalization of the workforce, low wages and wage growth remain key challenges
with 57% of regular employees earning ₹10,000
or less a month. Even among regular wage workers, more than half (57%) have
monthly average earnings of ₹10,000
or less, well under the Seventh Central Pay Commission (CPC) minimum stipulated
salary of ₹18,000 per
month. As for casual workers, 59% have monthly earnings of up to ₹5,000.
The data seen in isolation may suggest that we are almost a
developed economy, where inflation and wages have been absolutely stable for
past decade. Ram Rajya is all around, where the richest Asian and a poorest man
(rickshaw puller) are contended with no wage hike.
It may be relevant to note that since 2008 we have two pay
commission reports and the salaries of government and public sector employees
have grown multifold, despite rising deficit, inefficiencies and redundancies.
But these employees constitute a very small percentage of the total workforce.
In my view, the price situation in the country needs to be
critically examined from this viewpoint. Merely the rate of price inflation may
not be an adequate criterion to be considered in policy making.
I believe that the present absolute price levels of most
consumer staples, and even durables like passenger automobile, may be high and
unaffordable. Therefore, even a low consumer inflation rate of 2.5-3% might not
be a thing to celebrate. The government needs to work hard to bring
the absolute price levels lower even to sustain the present consumption, saving
and growth levels. Juxtaposing the following data points to the low
wage growth, shall give a glimpse of the problem I am worried about.
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(a) The prices of milk and milk products
rose 75% between 2011 and 2018 and are ruling at the higher prices.
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(b) The prices of vegetables doubled
between 2011 and 2014. Post 2014 they have been cyclical but mostly sustaining
at higher level.
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(c) Education expenses of a common
household has risen about 60% since 2011, and still showing a strong uptrend.
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(d) The household expenses on energy
have seen a70% jump since 2011, and not showing any signs of correcting.
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(e) The housing expenses (rental,
maintenance, renovation, furnishing etc.) have risen over 75% since 2011, and
continue to remain in strong uptrend.
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