OCCUPATIONAL WAGE SURVEY SIXTH ROUND 2008

OCCUPATIONAL WAGE SURVEY SIXTH ROUND 2008

REPORT ON TEXTILE INDUSTRY

CHAPTER - III

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 purchasing power. If the level of employment and under employment is an index of economic distress among the people of working age, the level of wages and earnings of workers serves 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, an increased real earnings means greater satisfaction of their wants.

3.2 WAGE RATES

In order to ensure comparability, the term wage rates 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 monthly, fortnightly and weekly wages actually paid are divided respectively by the actual mandays worked during the reference period to arrive at the daily wage rates.

3.3 AVERAGE DAILY WAGE RATES BY INDUSTRIES

The details of average daily wage rates of the workers are given in table 3.1. A perusal of the table reveals that the average daily wage rates worked out to Rs.200.16 in Jute Textiles, Rs.144.70 in Synthetic Textiles, Rs.136.24 in Woollen Textiles, Rs.130.56 in Silk Textiles and Rs.119.24 in Cotton Textiles.

At the stratum level taking all Textiles together the highest average daily wage rate was reported in West Bengal Rs.210.31 for the Jute Textiles whereas, the lowest average daily wage rate was reported in Tamil Nadu stratum Rs.64.52 for the Silk Textiles.

3.4 AVERAGE DAILY WAGE RATES BY SEX AND AGE

Average daily wage rates of workers by sex and age are also presented in table 3.1. The overall average daily wage rates of men, women and all workers for all the five textiles industries combined together were Rs.150.72, Rs.73.86 and Rs.141.79 respectively. The Table reveals that average daily wage rates of women workers were less than that of the men workers in all the five textiles industries. Further, at the stratum level also, the average daily wage rates of women workers were lower than their male counterparts in all the strata of all five textiles industries except Punjab stratum of Woollen textiles industry.

3.5 AVERAGE DAILY WAGE RATES BY SYSTEM OF PAYAMENT

The average daily wage rates of time-rated and piece-rated workers by sex and age have been depicted in tables 3.2 and 3.3 respectively. The average daily wage rates of time-rated and piece-rated workers worked out to be Rs.128.62 and Rs.193.81 respectively, for all the textiles taken together. Amongst five textiles industries, the average daily wage rates of time-rated workers was the highest at Rs.167.45 for Jute Textiles and the lowest at Rs.119.66 for Cotton Textiles. In case of piece-rated workers, the highest and the lowest average daily wage rates were reported Rs.209.46 for Jute Textiles and Rs.101.11 for Woollen Textiles respectively. The average daily wage rates of time-rated workers were more than that of the piece-rated workers in Cotton, Woollen and Silk Textiles, whereas it was reverse for Synthetic and Jute Textiles.

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

` As shown in table 3.2, the average daily wage rates of time-rated workers exhibit more or less the same trend as observed in case of wage rates of all workers given in

table 3.1. At the industry level, the average daily wage rates of time-rated men and women workers were the highest at Rs.168.49 in Jute Textiles and Rs.110.58 in Woollen Textiles respectively, whereas the lowest average daily wage rates for time-rated men and women workers were Rs.130.31 and Rs.69.26 respectively in Cotton Textiles.

For all the textiles industries taken together, the average daily wage rates for time-rated men, women and all workers were Rs.136.94, Rs.70.07 and Rs.128.62 respectively.

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

The average daily wage rates of piece-rated workers by sex and age are presented in table 3.3. For all the textiles industries combined, the average daily wage rates for piece-rated men, women and all workers were reported Rs.202.77, Rs.96.03 and Rs.193.81 respectively. The highest average daily wage rates of piece-rated men and women workers at the industry level was reported Rs.210.12 and Rs.136.55 respectively in Jute Textiles, whereas, the lowest average daily wage rates of piece-rated men and women workers was reported Rs.105.33 in Woollen Textiles and Rs.46.15 in Silk Textiles respectively.

3.8 AVERAGE DAILY WAGE RATES BY OCCUPATION AND SEX AND AGE

The average daily wage rates by occupation and sex & age for all the workers are presented in Table 3.4. The average daily wage rates for time-rated and piece-rated workers are shown in Tables 3.5 and 3.6 respectively. Table 3.4 shows that there is wide intra-occupation variation in average wage rates in Synthetic, Cotton, Silk and Woollen Textiles, whereas, it is comparatively less in Jute Textiles. However, wide inter-industries variation in the average daily wage rates were reported for common occupations as well as all occupations combined at industry level covered during the survey. 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 the wage rates shown under this are also non comparable. Due to these reasons, the wages paid to the 'Apprentices/Trainees' and the workers employed in 'Miscellaneous occupation' have been excluded from the purview of analysis in the following paragraphs.

In Cotton Textiles, the highest and the lowest average daily wage rates were reported at Rs.293.50 for 'Mechanical/Electrical Foreman' and Rs.72.33 for 'Blacksmith' respectively. In Woollen Textiles, the highest and the lowest average daily wage rates were reported at Rs.273.19 for 'Supervisor' and Rs.87.13 for 'Sorter' occupations respectively. The highest and lowest average daily wage rates in Silk Textiles were reported Rs.235.89 for 'Head Jobber' and Rs.73.76 for 'Cooker' occupations respectively. In Synthetic Textiles, the highest and the lowest average daily wage rates were reported Rs.307.69 for 'Front Sizer/Sizer' and Rs.68.75 for 'Tape Man' occupations respectively. In Jute Textiles, the highest and lowest average daily wage rates were reported Rs.229.43 for 'Breaker Receiver' and Rs.115.38 for 'Mechanic (General)' occupations respectively.

The women workers were reported to be employed in selected few occupations in the Textiles Industries. In Cotton Textiles, out of 83 occupations, women workers were employed in 49 occupations only. Out of these occupations, the average daily wage rates of women workers were lower than that of their men counterparts in all occupations except in 'Stitcher' occupation with marginal difference. In Woollen Textiles, out of 51 occupations, employment of women was reported in 12 occupations and their average daily wage rates were higher than that of their men counterparts in 3 occupations viz., 'Darner/Cloth Minder' 'Drawing Man' and 'Clipper Percher'. In Silk Textiles, out of 50 occupations, women workers were employed in 20 occupations and their average daily wage rates were slightly higher than that of their men counterparts only in one occupation 'Cloth Checker'. In Synthetic Textiles, out of 75 occupations, employment of women was reported in 25 occupations and their average daily wage rates were higher than that of their men counterparts in two occupations viz., 'Helper' and 'Drawing Frame Tenter'. In Jute Textiles, out of 41 occupations, employment of women was reported in 12 occupations and their average daily wage rates were higher than that of their men counterparts in three occupations viz., 'Sweeper', 'Breaker Feeder' and 'Finisher Receiver'.

The average daily wage rates of time-rated workers presented in table 3.5 follows more or less the same pattern as that for the all workers presented in table 3.4.

Average daily wage rates of piece-rated workers by occupations have been presented in table 3.6. The piece-rate system of wage payment was reported in all the Textile industries, however, it was prevalent only in a few occupations. The piece-rate system of wage payment in Cotton Textiles, Woollen Textiles, Silk Textiles, Synthetic Textiles and Jute Textiles industries was prevalent in 25 occupations, 2 occupations, 15 occupations, 9 occupations and 19 occupations respectively. Similarly, only 13 occupation in Cotton Textiles, 2 occupations in Woollen Textiles, 3 occupations in Silk Textiles, 1 occupation in Synthetic Textiles and 4 occupations in Jute Textiles had reported employment of women piece-rated workers. The average daily wage rates of piece-rated women workers were more than that of their men counterparts in 'Finisher/Attendant', 'Jobber', 'Knotter', 'Warper' and 'Winder' occupations in Cotton Textiles and 'Finisher receiver' occupation in Jute Textiles.

3.9 TRENDS IN WAGE RATES AND REAL WAGE RATES

The trend in average daily wage rates and real wage rates of workers in the five Textiles industries 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 all the Textiles industries during the period from first to sixth round of the survey.

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 of the Textiles industries have also been depicted in Table 3.7. It reveals that the real wage rates of the workers have increased during the sixth round in all the Textile industries except Cotton Textiles. However, there is no definite trend in real wage rates during the previous rounds of the survey. The maximum increase in real wage rates during sixth round as compared to fifth round was 26.29 per cent reported in the jute Textiles, followed by 17.01 per cent in Synthetic Textiles, 5.93 per cent in Silk Textiles and 1.15 per cent in Woollen Textiles whereas a decline of 24.58 per cent in the real wage rates during sixth round was reported in Cotton Textiles.

3.10 DEARNESS ALLOWANCE

Dearness Allowance (DA) is paid to the employees to compensate them for the 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. It not only differs from industry to industry but also within the same industry. A fairly large number of industrial establishments in the country pay a separate allowance known as Dearness Allowance to supplement the wages of their employees. It includes any payment made to protect the employees against the inflation and rising prices, such as, 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 the employees in the sample units.

3.10.1 EXTENT OF DEARNESS ALLOWANCE PAYMENT

Industry-wise and stratum-wise number of units paying DA as a separate component of wages/salaries is given in Table 3.8. For all Textile industries taken together, 15.92 per cent of units covered in the survey were paying dearness allowance as a separate component of wages/salaries. Among different textiles industries, 35.12 per cent units in Jute Textiles, 20.49 per cent units in Cotton Textiles, 17.39 per cent unit in Silk Textiles, 5.30 per cent units in Woollen Textiles and 4.65 per cent units in Synthetic Textiles were paying dearness allowance to their employees.

Out of the total units paying dearness allowance to their employees, 23.22 per cent units were reported to be using CPI numbers brought out by Labour Bureau for payment of DA, whereas 6.61 per cent of the units were using CPI series brought out by State Governments and remaining 70.17 per cent units were paying dearness allowance without using any CPI series. At the stratum level, all the units paying dearness allowance in Rajasthan and Gujarat strata of Cotton Textiles, Maharashtra stratum of Silk Textiles and Residual stratum of Woollen Textiles were reported to be using CPI series. Similarly all of the units paying DA belonging to Rajasthan, Maharashtra and Residual strata in Synthetic Textiles and belonging to West Bengal and Residual strata in Jute Textiles were reported to be not using any CPI series. None of the units paying DA pertaining to Cotton Textiles in Kerala stratum and Silk Textiles in Karnataka stratum was reported using CPI Numbers of Labour Bureau.

Of the units using Labour Bureau CPI Numbers for Industrial Workers for payment of dearness allowance to their employees, 79.21 per cent units were using CPI Numbers for Industrial workers (1982=100) and 14.05 per cent were using CPI-IW (1960=100).

While analysing data on the percentage of units using Labour Bureau Consumer Price Index Numbers, it is observed that 20.90 per cent units were using All India Consumer Price Index Numbers (AICPI) and 79.10 per cent were using others.

3.10.2 EXTENT OF EMPLOYEES RECEIVING DEARNESS ALLOWANCE

Table 3.9 reveals that 31.51 per cent employees in Cotton Textiles, 23.77 per cent employees in Woollen Textiles, 58.61 per cent employees in Silk Textiles, 11.61 per cent employees in Synthetic Textiles and 97.07 per cent employees in Jute Textiles were getting dearness allowance. The highest percentage of employees receiving dearness allowance i.e. 98.32 per cent was reported in West Bengal stratum of jute Textiles whereas the lowest percentage of employees receiving dearness allowance i.e. 1.98 per cent was in Residual stratum of Cotton Textiles. For all the five Textiles industries taken together, 41.72 per cent of employees were receiving dearness allowance. Of the total employees in the units paying dearness allowance in all the five Textile industries, 83.94 per cent of employees were receiving dearness allowance.

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

A number of methods and procedures are adopted by industrial units for compilation and payment of dearness allowance to its employees. The method 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 payment is presented in Table 3.10.

Out of the total units paying dearness allowance, the proportion of units paying dearness allowance according to variation in the Consumer Price Index Numbers i.e. CPI series brought out by Labour Bureau and State Governments was 26.27 per cent. A vast majority of units i.e. 64.63 per cent of the units were paying DA on flat rates, whereas 5.72 per cent units were paying DA on pay scale/slab system. Another, 1.69 per cent of units each paid D.A. by other methods and combination of all these.