India : The minimum wage temptation
It is easy to imagine the danger to an employment-intensive industry like garments, which faces wage competition from Bangladesh
Anyone who believes that stipulating steep minimum wage hikes
are a good idea should take a good look at Kerala. For decades, the state has had the highest minimum wage stipulations in the country, their history going back to its Communist governments of the 1970s. The current minimum wage stipulation is close to Rs 500 per day for farm work. Unlike in most other states, these minimum wages are enforced in Kerala because of the strength of the trade union movement. So far so good, since everyone likes higher incomes. Unfortunately the result has not been a workers’ nirvana, ...
T N Ninan
Business Standard
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