New Delhi: The minimum pay is a major anti-jobs policy. The central government is likely to announce an increase minimum pay effective January 1, 2016 mostly because their legislation requires an adjustment to the Consumer Price Index inflation measure.
The central government employees unions will hail this as a victory for “fairness” and a benefit for the lowest earning employees. They said, it will provide more income to support spending and stimulate the economy. If low paid employees work well, why not make the minimum pay Rs 25,000? This would provide to solve employees’ economic problems, eliminating poverty and stimulating the economy.
The economists have suggested that the higher minimum pay could be offset by eliminating waste in other aspects of the government business. This is the kind of absurd thinking that leads to bad policy.
According to them, raising the minimum pay is like killing flies with a shotgun, not very well targeted.
“Unemployment in India is projected to increase from 17.7 million last year to 17.8 million in 2017 and 18 million next year,” A UN Labour report had said. So the only thing raising the minimum pay does for them is to make it harder for them to get a government job if they ever decide they want one.
The government employees must bring at least as much value to the government as the government is paid or the government will fail and the maximum government jobs will be lost.
Hence, raising the minimum pay raises the hurdle an India’s unemployed youngster must cross to justify being appointed in government jobs.
The government cannot pay an employee more than the value the worker brings to the government. Raising the minimum pay denies more unemployed youths’ opportunity to get a government job
The impact of raising the minimum pay on teen employment will make it very clear that this is especially harmful for unemployed youths looking for their first opportunity to have a government job.
Raising the cost of employee raises the incentive for the government to find ways to use less employees.
“They have fixed the minimum pay at a meagre Rs. 18,000 in the 7th Pay Commission. In the last Pay Commission, the basic pay was Rs. 7,000. They multiplied it by 2.57 (fitment formula) and came to Rs. 18,000. We are demanding 3.68 fitment formula,” Shivgopal Mishra, Convenor of National Joint Council of Action (NJCA), earlier had said.
NJCA is a front formed by six government staff unions, including Confederation of Central Government Employees (CCGE), All India Defence Employee Federation and National Coordination Committee of Pensioners Association, to oppose the hikes minimum pay given by the 7th Pay Commission.
The cabinet approved the Seventh Pay Commission’s recommendations for central government employees on July 29 and have been implemented from January 1, 2016, which impacts some 48 lakh central government employees and 52 lakh pensioners.
The 7th Pay Commission had recommended the minimum from Rs.7,000 to Rs.18,000 per month while the maximum pay has been hiked from Rs.80,000 to Rs.2.25 lakh per month and Rs.2.5 lakh for the cabinet secretary—the senior-most civil servant and a fitment factor of 2.57 has been proposed to apply uniformly for all employees.
The central government employees unions are demanding for hiking minimum pay Rs 18,000 to Rs 25,000 and the and asked to raising fitment factor 3.68 times from 2.57 times.
Finance Minister Arun Jaitley made a commitment to hike the minimum pay of central government employees beyond Rs 18,000.
Accordingly, he had formed a 22-member National Anomaly Committee headed by Secretary, Department of Personnel and Training (DoPT) in September, 2016 to look into pay anomalies arising out of the implementation of the 7th Pay Commission’s recommendations.
But the committee had not come forward with any decision of hike in minimum pay for the central government employees till date.