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The lingering crisis of labour post-pandemic

  • Published
    6th Dec, 2022
  • The International Labor Organisation (ILO) has recently released two reports: ‘Global Wage Report 2022-2023 and ‘Asia-Pacific Employment and Social Outlook 2022, highlighting the global employment scenario (post-pandemic).

What does the data show?

  • Trends in Nominal wage: The nominal wages rose to Rs17,017 per month in 2021 from Rs4,398 in 2006. The source referred to was the Ministry of Statistics and Programme Implementation.
  • Factoring in Inflation: The real wage growth in India plunged to -0.2% in 2021 from 9.3% in 2006.
  • Negative Growth: The negative growth in India started after the pandemic.
  • Neighboring Countries:
  • In China, the growth decreased from 5.6% in 2019 to 2% in 2022.
  • In Pakistan, the growth is -3.8%.
  • Figures for Sri Lanka were not available
  • Impact on low earners: The greatest impact was on lower-income earners as they have to spend most of their disposable income on essential goods and services.

Is inequality rising?

  • At the Asia-Pacific level: Only the jobs in high-skill occupations saw a recovery from the COVID-19 crisis, and the same is true across all subregions.
  • Hit on Low-to-medium-skill jobs: There is an employment gain of 1.6% among high-skill workers between 2019 and 2021, but there is no such substantial gain among low-to-medium-skill workers.
  • Among G-20 Countries: A significant gap in the average level of real wages between advanced G-20 countries and emerging G-20 countries such as India has been observed.
  • It is on the level of about $4,000 per month in advanced economies and about $1,800 per month in emerging economies.

What are the ILO’s remedies?

  • Prudent price expectation: It is crucial to safeguard the standard of living of low-income households against unexpected future inflation hikes.
  • Managing wage inflation: The potential measures which are to be taken to safeguard the standard of living must not come from undesirable wage inflation.
  • Creation of decent formal wage employment: It is a prerequisite for a more equitable distribution of wages and income, and is a key contributor to equitable and sustainable wage growth.
  • Focus on the gender pay gap: The governments must focus on the gender pay gap as when women leave the labor market, they are less likely to return than men.
  • Collective Efforts: Collective efforts are required to gain momentum for growth. The government has to strengthen labor market institutions and wage policies.
  • Multilateral approach: There is an urgent need to address the negative effects of climate change; increasing inequalities; the poverty, discrimination, violence, and exclusion endured by millions of people.
    • Taking down Discrimination: The discrimination that women and girls continue to suffer in many parts of the world must end.
    • Ensuring HealthCare: Access to vaccines, adequate sanitation and essential healthcare for all must be ensured.
    • Reducing the digital divide: The growing digital divide between poor and wealthier countries needs to be reduced as it poses a potential speed-breaker when it comes to equitable growth.

About International Labour Organization (ILO)

  • Established in 1919 by the Treaty of Versailles as an affiliated agency of the League of Nations.
  • The full form of ILO is International Labour Organization.
  • Headquarters: Geneva, Switzerland
  • Became the first affiliated specialized agency of the UN in 1946.
  • Tripartite principle: The basis of the ILO is the tripartite principle, i.e. the negotiations within the organization are held between the representatives of governments, trade unions, and member-states employers.
  • The ILO is known to be the oldest and first specialized agency of the U.N.
  • The organization’s main objective is to provide services that unite forces among governments, workers, and businesses.
  • It focuses on workers' or laborers' need to enjoy equity, freedom, human dignity, and security via employment.
  • The International Labour Organization encourages international Labour standards.
  • Received the Nobel Peace Prize in 1969

India and ILO

  • India is a founding member of the ILO and it has been a permanent member of the ILO Governing Body since 1922.
  • In India, the first ILO Office was started in 1928.
  • India has ratified six out of the eight core/fundamental ILO conventions. These conventions are:
    • Forced Labour Convention
    • Abolition of Forced Labour Convention
    • Equal Remuneration Convention
    • Discrimination (Employment Occupation) Convention
    • Minimum Age Convention
    • Worst forms of Child Labour Convention
  • India has not ratified the two core/fundamental conventions, namely Freedom of Association and Protection of the Right to Organise Convention, 1948, and the Right to Organise and Collective Bargaining Convention, 1949.
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