A socialist relic

Why does the print media still have a Wage Board?

The announcement by different newspapers of staff lay-offs and closure of marginal editions in the smaller towns has created new uncertainties in an already troubled industry, and underlined the difficult period of transition that the media has been going through. The shift to digital platforms, the arrival of new kinds of competition for advertising from giant entities such as Google, and the financial stresses evident in the English language TV news channels — all of these point to continuing flux, and the near-certainty that at least some of the weaker media outfits will end up as unredeemed losers. In this environment, even profitable media companies will be prompted to look harder at their costs, and trim marginal operations. Ironically, it is the legacy print business that continues to provide the bulk of the revenues, and all of the profits; but everyone knows that this is the declining end of the business. The digital media is the growth sector but, like many other segments of the digital space, is very far from being profitable.

All this is hard enough to deal with for an industry that has few really profitable players, since most balance sheets are subject to cyclical swings and quite a few are plain dogs. What add to the complications are the rigid wage levels and even wage structure imposed on the print industry (but not on TV channels and websites) by the periodic wage boards. These are set up by the government under an Act of Parliament that was passed when such wage boards were the norm. But from a time when there were wage boards for a dozen and more industries such as textiles, cement, sugar and jute, the country has moved to a position today where the sole surviving wage board is for the print media. Why this one sector should be treated differently is a valid question, especially when, unlike the wage boards that used to exist for other industries, the newspaper wage board is not a tripartite body. As a consequence, successive wage boards have shown little understanding of the industry, choosing to categorise companies by turnover rather than profits and financial capacity to pay. Also, as with the government pay commissions, the stipulated wages are higher than what a free market would dictate at the lower end, and way below existing realities at the upper end. The stipulated maximum wage is between three and four times the minimum — and about as laughably unreal as you can get.

The dangers implicit in this situation are obvious. Under-served areas which need better news media penetration will be neglected. Profitable companies will be pushed into the red, as has already happened in some cases. As in any situation when wages become too high to bear, employment will suffer. At a time when the print industry needs flexibility on costs, it can do without more archaic interventions that are based on a poor understanding of the realities facing the industry. The recent announcements of lay-offs are a warning of more such that may be in store.