Fair wage
Topic: Employment, Unemployment and Informalisation · NCERT: Beyond NCERT
Meaning
A fair wage is the middle step of the wage ladder set out by the Committee on Fair Wages (1948). It lies between the minimum wage and the living wage:
- The minimum wage is enough for basic survival.
- The living wage is enough for a decent life, with education, health and some comforts.
The fair wage in a given industry depends on its capacity to pay, its productivity and the prevailing wages in the area.
Example
A profitable, highly productive factory can afford a fair wage well above the legal minimum. A struggling small unit in the same trade may be able to pay only a little above the minimum.
Don't confuse with
- Living wage: the top of the ladder, which Article 43 of the Constitution aims for. A fair wage is lower, because it depends on what the industry can afford.
Related concepts
- Labour laws
- Tripartism
- Floor wage
- Living wage
- Need-based minimum wage
- Lay-off
- Retrenchment
- Hire and fire
- Standing orders
- Fixed-term employment