Win some, lose some: The surprising post-pandemic changes in wage growth

The more educated have had slower growth but they are the highest paid in the country

Wages in India are slowly picking up from their pandemic dip but remain in single-digit territory.

 

Wages have grown at 8.7 per cent on an annualised basis since 2018-19, shows data from the Centre for Monitoring Indian Economy (CMIE) based on its Consumer Pyramids Household Survey. This is lower than the 12 per cent growth in 2018-19 and 31 per cent growth seen in 2017-18, though recovery from demonetisation and associated disruptions may have played a role in the latter figure. The latest growth figure is despite a nearly 19 per cent year-on-year growth in 2024-25, the fastest in seven years. 

The government has announced an income distribution survey, tentatively set for 2026. It will also capture wage data. Wages are a part of income, which can also include inflows such as rent or interest. Earlier attempts at collecting income data had not been successful. The CMIE numbers provide some insight into wage growth across different segments since 2014-15. 

Education data shows over a 3 per cent difference in the fastest and slowest growing segments. Those with no education saw wages grow at 10.6 per cent per annum since 2018-19, the last normal year before the pandemic. The more educated had slower wage growth over this period (chart 1). 

 

This is not to say that education does not pay. The highest wages are for the highest education levels (more than Rs 4 lakh per annum for those who are graduates or more in 2024-25). Those with no education make around Rs 1.29 lakh. However, the numbers show slower growth at the top of the education pyramid since the pandemic. The latest figures show some reversion, with over 20 per cent wage growth for the most educated in 2024-25, marginally more than the 19 per cent seen for those with no education.

 

The gender gap is slightly narrower after the pandemic. Men earned more than twice the wage of women (a 107 per cent difference) in 2018-19. They now earn roughly 72 per cent more (chart 2). 

 

Salaried employees were among the laggards, according to occupational data. Salaried employee wages are up 6.2 per cent since 2018-19, compared to the overall figure of 8.7 per cent (chart 3). 

 

While there has been a pick-up in wages for the most educated in the latest year, salaried wage growth continues to lag overall growth in 2024-25.