 "Salaried, self-employed real wages below 2017-18 levels: Eco Survey")
Real average monthly wages for self-employed and salaried workers in 2023-24 stood below the 2017-18 levels, showed the annual Economic Survey on Friday.
Data in the survey for Financial Year 2024-25 (FY25) showed that real monthly wages for male self-employed workers were 9.1 per cent lower (Rs 8,591) in 2023-24 as compared to 2017-18 (Rs 9,454) level. Monthly wages for female self-employed workers in 2023-24, too, were 32 per cent lower at Rs 2,950.
On the other hand, monthly wages for male salaried workers stood 6.4 per cent lower (Rs 11,858) in 2023-24 from Rs 12,665 in 2017-18 level. For the female salaried workers, it was 12.5 per cent lower (Rs 8,855) in 2023-24 from Rs 10,116 in 2017-18.
The female labour force participation rate (FLFPR) – a measure of their participation in the economy – increased to 41.7 per cent in 2023-24 from 23.3 per cent in 2017-18, with the share of "own account workers/employers" surging to 31.2 per cent from 19 per cent in rural areas, which experts attribute as a sign of distress. The survey said the increase in FLFPR is a “significant move toward independent work and entrepreneurship”.
However, the wages of casual workers stood at a higher level in 2023-24 as compared to 2017-18 levels. Average daily wages for male casual workers was 19.2 per cent higher (Rs 242) in 2023-24 from Rs 203 in 2017-18. For females, it was 24 per cent higher at Rs 159 from Rs 128.
Arun Kumar, former professor, Jawaharlal Nehru University, said wages of self-employed and salaried workers have suffered in these past years. “First, it was successive economic policy shocks like demonetisation, Covid lockdown. Then, due to supply constraints inflation remained high, resulting in erosion of earnings."
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“Also, profitability in the private sector has remained quite high in these past years, without a commensurate increase in earnings by workers. The high unemployment rate during the pandemic recovery period also meant that people had to work at quite low wages. All these factors have contributed to contraction in real wages,” he said.
Labour economist Santosh Mehrotra said that wages of both self- employed and salaried workers have stagnated. “The rise in daily wages of casual workers is primarily on account of revival in the construction sector. However, these workers are only one-fifth of total workers in India,” he said.
The survey noted that the construction industry, one of the largest employers of casual labour, has been gaining momentum since mid-FY21 and has grown some 15 per cent from its pre-pandemic trend, driven by infrastructure development and housing demand.
While corporate profits grew 22.3 per cent in FY24, employment expanded by a mere 1.5 per cent. “Despite Indian companies achieving a stable ebitda margin of 22 per cent over the last four years, wage growth has moderated. This uneven growth trajectory raises critical concerns. Wage stagnation is pronounced, particularly at entry-level IT positions,” said the survey.
Sector wise, the survey showed the real wage rate in agriculture demonstrated modest growth, increasing by 0.6 per cent for men and 1.8 per cent for women. In non-agricultural activities, real wage growth was noteworthy for women, reaching 2.6 per cent, compared to 0.4 per cent for men during the same period.
The Economic Survey computed data on real wages from the Periodic Labour Force Survey, conducted for the government by the National Statistics Office. The NSO classifies workers in three broad categories: Self-employed, salaried/wage and casual workers.
Sector-wise wage trends
The Economic Survey showed that real wage growth in agriculture was modest, increasing by 0.6 per cent for men and 1.8 per cent for women. In non-agricultural activities, real wage growth was more pronounced for women, reaching 2.6 per cent, compared to 0.4 per cent for men during the same period.