WAGE RATES AND DEARNESS ALLOWANCE

3.1 INTRODUCTION

The availability of information on wages and earnings of workers is an important parameter to assess the wage level in the country. If we consider the level of unemployment and under employment as an index of economic distress among the people of working age, the level of wages and earnings of workers serve as an indicator of the economic prosperity of the working population.

Ever since the introduction of planned economy, the living standards of the working population have become dependant, more or less, on levels of earnings. Other types of income are at times, significant but for most of the workers, earnings from paid employment constitute the major source of income. Earnings or take home wages/salaries, which provide means of livelihood, tend to conform to the income needed to enable the labour force to maintain its customary standard of living in the long run. If the greater employment means the ability of a large number of persons to satisfy their needs, increased real earnings mean greater satisfaction of their wants.

3.2 WAGE RATES

In order to ensure comparability, the term ‘Wage Rate’, has been defined as the sum of basic wage and dearness allowance in respect of workers who receive both these components, while for other workers the actual consolidated amount of earnings represent wage rate. The wage rates were collected for all the occupations. The monthly, fortnightly or weekly wages actually paid are divided by the actual number of mandays worked to arrive at the daily wage rates.

3.3 AVERAGE DAILY WAGE RATES BY STRATUM

The details of average daily wage rates of the workers by Stratum and Sex-age are presented in Table 3.1. A perusal of the Table reveals that the average daily wage rates in the Textile Garments Industry were Rs. 121.31. At the stratum level, the lowest average daily wage rate of Rs. 100.06 was reported in Tamil Nadu Stratum, followed by Rs.115.28 in Karnataka Stratum. On the other hand, the highest average daily wage rate of Rs.157.11 was reported in Maharashtra Stratum, followed by Rs.153.92 in Delhi Stratum.

3.4 AVERAGE DAILY WAGE RATES BY SEX-AGE

The Table 3.1 reveals that average daily wage rates were reported at Rs. 142.77 for men and Rs.106.55 for women workers in the Textile Garments Industry. The average daily wages of women workers were reported to be less than that of the men workers in Delhi, Maharashtra, Karnataka, Tamil Nadu and Residual strata whereas, these were more than that of the men workers in Haryana and Uttar Pradesh strata of Textile Garments Industry. The highest average daily wage rate of women workers was reported at Rs.156.12 in Uttar Pradesh Stratum, whereas, the lowest average daily wage rate of women workers was reported at Rs.95.91 in Tamil Nadu Stratum.

3.5 AVERAGE DAILY WAGE RATE BY SYSTEM OF PAYMENT

The average daily wage rates of time-rated and piece-rated workers by sex-age have been depicted in Table 3.2 and 3.3 respectively. The average daily wage rates of time-rated and piece-rated workers worked out to Rs.119.16 and Rs.226.91 respectively for the Textile Garments Industry.

3.6 AVERAGE DAILY WAGE RATES OF TIME-RATED WORKERS BY SEX-AGE

As shown in Table 3.2, the average daily wage rates for time-rated men, women and overall were reported at Rs.138.49, Rs.106.42 and Rs.119.16 respectively. At the stratum level, the highest average daily wage rates of time-rated men workers were reported at Rs.156.72 in Residual stratum and time-rated women workers at Rs.156.12 in Uttar Pradesh stratum, respectively. The lowest average daily wage rates of time-rated men workers were reported at Rs.118.27 in Haryana stratum and time-rated women workers at Rs.95.87 in Tamil Nadu stratum respectively.

3.7 AVERAGE DAILY WAGE RATES OF PIECE-RATED WORKERS BY SEX-AGE

The average daily wage rates of piece-rated workers by sex-age are given in Table 3.3. The average daily wage rates for piece-rated men, women and overall were reported at Rs.235.30, Rs.147.81 and Rs.226.91, respectively. At the stratum level, the highest average daily wage rates of piece-rated men workers were reported at Rs. 428.73 in Uttar Pradesh stratum and for piece-rated women workers at Rs.280.00 in Residual stratum. The lowest average daily wage rates of piece-rated men workers were reported at Rs.145.63 in Delhi stratum whereas for piece-rated women workers at Rs.128.68 in Tamil Nadu stratum.

3.8 AVERAGE DAILY WAGE RATES BY OCCUPATION AND SEX-AGE

The average daily wage rates by occupation and sex-age for all the workers employed in Textile Garments Industry are presented in Table 3.4. Tables 3.5 and 3.6 shows average daily wage rates for time-rated and piece-rated workers, respectively. Table 3.4 shows that there is wide inter-occupation variation in average daily wage rates in Textile Garments Industry. Table 3.4 also shows that the highest average daily wage rate at the occupation level was reported at Rs.281.83 in 'Designer' occupation followed by Rs.216.60 in 'Supervisor' occupation and Rs.216.44 in 'Store Keeper' occupation. The lowest average daily wage rate was reported at Rs.89.00 in 'Marker' occupation followed by Rs.91.98 in 'Sorter' occupation and Rs.97.19 in 'Sweeper' occupation. The average daily wage rates were found to be more than Rs.100.00 in 21 occupations out of total of 26 occupations reported in the Textile Garment Industry. Out of the 26 occupations, men workers were found employed in 25 occupations and women workers were found employed in 21 occupations. Out of the 26 occupations, both men and women workers were found employed in 20 occupations and the average daily wage rates of men workers were higher than that of their women counterpart in all the occupations except 'Designer' occupation. Thus the women workers were getting more wages than that of their men counterparts in only about 5 per cent occupations, in which they were employed in the Textile Garments Industry. (The wages paid to workers employed as 'Apprentices/Trainees' are generally low and a fixed amount which are not at par with the wages paid to the regular workers and hence not comparable. The workers employed in minor occupations have been clubbed together as 'Miscellaneous' occupation. Since it is a combination of several occupations hence not comparable. Due to these reasons, the wages paid to the 'Apprentices/Trainees' and the workers employed in 'Miscellaneous' occupations have been excluded from the preview of analyses in the following paragraphs). The average daily wage rtes of time-rated workers by occupation and sex-age presented in Table 3.5, follows more or less the same pattern as that for all workers presented in Table 3.4.

The average daily wage rates of piece-rated workers by occupation and sex-age have been presented in Table 3.6. The piece-rated system of wage payment was prevalent only in 7 occupations with the highest average daily wage rate of Rs.585.00 in Cutting Machine Operator occupation. The average daily wage rates of piece-rated men, women and all workers have been reported at Rs.235.30, Rs.147.81 and Rs.226.91, respectively which are significantly higher than the time-rated men, women and all workers. The average daily wage rates of piece-rated workers viz. Helper, Tailor, Cutter, Cutting Machine Operator, Ironer and Tailor (Specialist) were higher than their time-rated counterparts in 6 out of 7 occupations. The only occupation in which average daily wage rates of piece-rated workers were lower than their time-rated counterparts was 'Supervisor'.

3.9 TREND IN WAGE RATES AND REAL WAGE RATES

The trend in average daily wage rates of workers in Textile Garments Industry has been presented in Table 3.7. The Table reveals that there has been increasing trend in the average daily wage rates of workers in the Textile Garments Industry.

In order to assess the improvement in the economic conditions of the workers, it is necessary to examine the data on real wage rates. The real wage rates for the year y¹ have been worked out with reference to the All India Consumer Price Index Numbers by shifting its base to the year y⁰=100. Symbolically, the Real Wage Rates for the year y¹ with respect to the year y⁰ may be defined as:

₁₉₆₀AICPI^y0

RE^y1 = ---------- x E^y1

₁₉₆₀AICPI^y1

where,

E^y1	=	Actual earnings for the year y¹
RE^y1	=	Real earnings for the year y¹
₁₉₆₀AICPI^y0	=	All India CPI Number for year y⁰ with base 1960=100
₁₉₆₀AICPI^y1	=	All India CPI Number for year y¹ with base 1960=100

The real wage rates and percentage increase in real wage rates in a round with respect to that in the previous round in the Textile Garments Industry have been depicted in Table 3.7. The Table reveals that the real wage rates of the workers increased at the rate of 7.74 per cent during the sixth round as compared to that during the fifth round.

3.10 DEARNESS ALLOWANCE

Dearness Allowance (DA) is paid to the employee to compensate them for erosion in their wages due to increase in the price level. The system of payment of DA has its own diversity and disparity in the pattern of payment of remuneration to employees. A fairly large number of industrial establishments in the country pay a separate allowance known as the dearness allowance to supplement the wages of their employees. It includes any payment made to protect the employees against the inflation and rising prices, viz., dearness allowance (DA), variable dearness allowance (VDA), interim relief, dearness pay, etc. Since the payment of dearness allowance is not occupation specific, therefore, the information collected during the survey covered all employees in the sample units.

3.11 EXTENT OF DEARNESS ALLOWANCE PAYMENT

Stratum-wise number of units paying dearness allowance as a separate component of wages/salaries is given in Table 3.8. It is observed that 16.58 per cent of the units covered in the survey were paying dearness allowance as a separate component of wages/salaries in the Textile Garments Industry. The highest percentage of units paying dearness allowance was reported in Karnataka i.e. 33.49 per cent, followed by 27.48 per cent in Tamil Nadu Stratum. It is further observed that none of the Textile Garments units in Haryana and Maharashtra strata was paying dearness allowance.

Out of the total units paying dearness allowance to their employees, 9.57 per cent of the dearness allowance paying units were reported to be using Consumer Price Index Numbers for industrial workers brought out by Labour Bureau for payment of D.A. to their employees. Only 4.63 per cent of the D.A. paying units were using Consumer Price Index Numbers for industrial workers Series brought out by State Governments. A vast majority of D.A. paying units i.e. 85.80 per cent were paying dearness allowance to their employees without using any CPI (IW) Series. In Uttar Pradesh Stratum, all the D.A. paying units were using Consumer Price Index Numbers for industrial workers brought out by Labour Bureau whereas in Residual stratum 50 per cent each of the D.A. paying units paid dearness allowance to their employees by using the Consumer Price Index Numbers for industrial workers brought out by Labour Bureau and State Governments respectively. In Delhi, Karnataka and Tamil Nadu strata none of the D.A. paying units was using either Bureau or State Series of Consumer Price Index Numbers for industrial workers for payment of D.A. to their employees.

It is further observed that all the units using Labour Bureau’s Consumer Price Index Numbers for industrial workers which belonged to Uttar Pradesh and Residual strata were using Consumer Price Index Numbers for industrial workers (1982=100) for payment of dearness allowance to their employees.

While analysing data on the percentage use of Labour Bureau’s Consumer Price Index Numbers, it is observed that all the units were using Centre Indices of the Consumer Price Index Numbers for Industrial workers.

3.12 EXTENT OF EMPLOYEES RECEIVING DEARNESS ALLOWANCE

Table 3.9 reveals that 95.32 per cent of the total estimated employees in D.A. paying units were getting dearness allowance in the Textile Garments Industry. At stratum level all the employees in D.A. paying units in Delhi Stratum closely followed by 99.73 per cent in Residual stratum were getting dearness allowance. The percentage of employees receiving dearness allowance to total estimated employees in the D.A. paying units was reported the lowest at 83.24 per cent in Uttar Pradesh.

3.13 PERCENTAGE DISTRIBUTION OF UNITS PAYING DEARNESS ALLOWANCE BY CRITERION FOR PAYMENT

A variety of methods and procedures are adopted by industrial units for computation and payment of dearness allowance to their employees. The methods followed by units are either according to changes in Consumer Price Index Numbers or linked to Pay Scales/Slabs or paid at a Flat Rate or combination of all these systems. Distribution of units paying dearness allowance by system of D.A. payment is presented in Table 3.10. It reveals that the system of paying dearness allowance on the basis of Pay Scale/Slabs was not reported in the Textile Garments Industry. Majority of the D.A. paying units i.e. 71.30 per cent were paying dearness allowance on the basis of Flat Rate while 14.51 per cent, 9.56 per cent and 4.63 per cent were using other methods, Consumer Price Index Numbers (IW) and combination of all these methods respectively.