Wages of manual workers in India: a comparison across states and industries

Abstract

This paper examines whether the earnings of workers engaged at the lowest rungs in the labour market have risen in the recent years. It first constructs a wage series of agricultural workers pertaining to the period 1973-2015 for 16 major states to analyse the trends and regional patterns. Next, the paper builds a wage series of workers engaged at the lowest rungs in major manufacturing, mining and plantation sectors for assessing any change in their earnings through 2000-2015. The periods chosen for the farm and non-farm sectors are not the same since comparable data for longer periods are not available for all the sectors. The wages of workers under study closely define their poverty status: that a dip in the wages would push many below the poverty line. Next, the wages of agricultural workers were largely stagnant between the 1970s and 1990s and showed an increase only between 2005 and 2010-12, suggesting that despite the economy growing at more than six percent since the three odd decades, the wages of agricultural workers have grown only modestly. The situation in the non-farm sector is no different; there is stagnancy in the wages. Data further show that the earnings of all employees (i.e. including skilled workers, managers, etc.) have risen nearly twice in 15 years between 2000 and 2015, while the wages of unskilled manual workers have remained stagnant, suggesting that unskilled work is increasing less in demand.