Agri Workers’ Tiny Wage Rise Wiped Out by Inflation

For those leaders of the country who are tearing their hair trying to figure out how to get the economy moving, boost growth, increase investment and create jobs, it would be instructive to look at the plight of the largest economic class in the country – agricultural labourers. Numbering upward of 14 crore, they are the poorest, least paid workers, forced to seasonally work multiple jobs just to survive.

The latest data, collected by the Labour Bureau under the Ministry of Labour (available with the Reserve Bank of India for male workers) shows that over the past five years, wages of male agricultural workers has increased at a shockingly low rate of just Rs.15 per year. (See chart below) That is about 6% per year or 29% in five years.

In August 2022, the last month for which data was available at the time of writing, the wage was Rs.343 per day. Remember that the agricultural workers work only seasonally – as and when there is work in the fields depending on crop cycles. They may get ploughing or transplanting, weeding or watering or harvesting work for 10-15 days at a stretch, then a gap of weeks or months. So, the average wage over the year from agricultural work diminishes to almost nothing if spread out over the whole year.

But the story doesn’t end there. Prices have risen continuously in the same period by about 28%, as shown in the chart above based on the officially estimated Consumer Price Index (CPI) for Rural Labour. That effectively wipes out the meagre increase in wages. In other words, ‘real’ or actual wages have remained stagnant or even dipped slightly.

Caste and Gender Discrimination

The data on wages given above is for male workers. Female workers – which number more in the agricultural labour workforce than in other sectors of the economy – suffer from institutionalised discrimination. For example, in August 2022, while the male agricultural worker gets an average of Rs.343 per day, female workers’ average daily wage is recorded at Rs.271. That’s over 20% less than the male worker. Such differences are present in all the types of work that male and female rural labourers do. There are many types of work that only males undertake, like plumbers, carpenters, electricians, blacksmiths, drivers, etc.

It is noteworthy that some of the lowest paid jobs in rural areas are those which are usually taken up only by the most socially oppressed sections of society, that is, the Scheduled Castes (SC). For example, ‘sweeping and cleaning workers’ were reported to be getting Rs.290 per day (male) and Rs.269 per day (female) on an average, in August 2022. Since a large proportion of agricultural labourers are from SC communities, during the lean season or even on daily basis, they supplement their incomes with doing this work.

Increase Wages to Boost Economy

So, what’s the connection of all this to the economy, investment, growth and jobs? The reason why the economy is in the doldrums is because there is no buying power in the hands of the people. Low wages ensure that people are unable to spend much, barely managing to purchase the most essential commodities or services. This means there is very limited demand in the economy. So, no amount of cajoling or incentives will lure private capital to start expanding productive capacities.

The government, on its part, can possibly spend more but the present dispensation is shackled by its commitment to the neoliberal dogma (like Liz Truss, erstwhile UK Prime Minister) of restricting government expenditure. So, nothing is going to come from their side. The result is that corporate profits are being ensured only by squeezing workers, keeping their wages low and in fact, keeping a reserve army of unemployed so that wages remain depressed. This also means that the terms of trade between urban/industrial sectors and rural/agrarian sectors are highly skewed – resources flow away from rural/agrarian sectors towards urban/industrial sectors.

As long as this stranglehold persists, wages will remain depressed, unemployment will remain rife and profit margins will remain high. The Narendra Modi government may dole out this or that scheme, reluctantly, to give some relief to people and win their votes. But, in the long run, this is not going to work and the misery of the working people is bound to burst out.

If agricultural workers were to get better wages that would help them lead better lives, the whole economy would benefit because the sheer numbers are so big. Any infusion of more buying power in the hands of 14 crore people would decisively boost the economy, create demand, help expand production and help increase employment in other sectors.

Organisations representing agricultural workers have been demanding for long that a comprehensive law covering all aspects of agricultural labourers’ work should be brought in by the government. It is a sign of how deep the neglect of this vast labouring class is, that till this ‘Amrit Kaal’ of 75 years since Independence there has been no legislation for protecting the rights of agricultural workers, providing for dignified wages and working conditions or social security.