The lingering crisis of labour post-pandemic

• 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.

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.