Wage growth slowest in five years: MC Analysis

Wage growth in India slowest in five years, barring the pandemic

India’s wages grew at the slowest pace in five years in the first quarter of FY25, barring the pandemic, with women being worst affected, according to a Moneycontrol analysis of periodic labour force survey data released by the statistics ministry.

While the Indian economy grew at 9.7 percent in nominal terms in the first quarter of FY25, wages of regular wage/salaried earners increased 5.3 percent, compared with 7.8 percent in the first quarter of FY24. Wage growth in the self-employed category more than halved at 4.1 percent compared with 9.5 percent in the previous year.

The only category to witness a rise in wages were casual labourers whose wages rose 7.4 percent, on the back of a 7.5 percent increase in rural wages.

Over half of the workforce is engaged in self-employment category, with 21.7 percent employed in regular work or salaried jobs and 19.8 percent in casual workers.

In Q1FY25, monthly income of self-employed grew just 4.1 percent, compared with 5.3 percent growth in regular/salaried work.

Self-employed wages at Rs 13,900 per month were 51 percent less than the regular salaried work at Rs 21,103 per month.

Women lose out

Analysis shows that women were worst affected across categories, with women engaged in regular work suffering the most.

Wages for women in regular work were flat compared with the previous year, recording just a 0.6 percent growth from the first quarter of FY24. On the other hand, men’s wages grew at 6.4 percent in Q1FY25.

In the case of self-employed, women’s wage growth eased to 2.9 percent from 6.1 percent in the first quarter of FY24, while men’s wages were double at 6.1 percent.

Women employed in casual work also earned relatively less than men, with their wages growing 5.2 percent compared with 6.3 percent for men.

Urban-rural divide

While for salaried jobs, urban wage growth was higher than rural areas, in the self employed category rural wages grew faster at 3.3 percent compared with 3.1 percent for men.

The good monsoon season was also evident from the wages for casual work in rural areas.

Casual workers earned 7.5 percent higher from last year in Q1FY25, compared with 4.7 percent growth witnessed in urban areas.