Why minimum hourly wages is important for people in India?

Minimum hourly wages is a big deal. People in India should understand that. There are several reasons.

Minimum hourly wages in India is 25 cents /hr

Minimum wages in India is pegged at 137 Rs/ day or $2 /day. Assuming that there are 8 working hours, the minimum hourly rate for Indian employee is a measly 25 cents/hr. This is quite low. Even China, which has equally poor employment practices, has $2 /hr as minimum hourly wages.

More than 50% in taxes in India

I pay a lot of taxes in India. I do not like that. I pay 30% income tax. I pay 15% service tax / VAT. I pay road taxes when I buy a car. I pay property taxes since I own a house. I pay water tax, huge premium for getting more water, etc. 50% of my income in India goes to the government in paying taxes. Nobody likes to be in that position.

In a way, our government is justified. Taxes are a way to re-distribute income, not a way for providing services. The income disparity between the rich and the poor in India is increasing. Taxes are a way to re-distribute income. Why should we choose a circuitous path to re-distributing income. Why not directly increase the minimum hourly wages and see if that can reduce tax liability?

Poor environment for individual contributors in India

Individual contributors who make a lot of money are real suckers paying a lot of taxes. There are movie actors who are individual contributors. But, they make money by sucking money out of the masses. Since they get money from the masses, they are right in paying a lot of taxes. And it makes sense for such individual contributors to live in India.

But what about software engineers? Software engineers make a lot of money and are individual contributors. Software engineers do not suck out money from the masses (like actors or cricketers do). We provide a valuable service to the global community. But we end up paying a lot of taxes as well. If software engineers move to, say, Canada and provide the same service, we can save money on paying taxes to the Indian government, and yes, we have a better life.

Are more software engineers good for India? Yes. Do we have a conducive environment for software engineers to thrive? No. Are software engineers suckers? A big Yes.

One way to ensure software engineers and individual contributors are compensated is by raising the minimum hourly wages. When the hourly wages are raised, all individual contributors are well compensated. The need for supervisors and hierarchy is reduced. A lot of good happens in the society by removing supervisors, hierarchy and middle men.

Minimum hourly wages safeguards against excessive capitalism

For the rest of the world, minimum hourly wages is a measure of productivity, and safeguards people from the forces of excessive capitalism. Slave labour is a side-effect of pure capitalism. It is undesirable. That is why the rest of the world has minimum wages to protect the people.

In India, we need to raise the minimum hourly wages from 25 c/hour to 2 $/hour. Hopefully, this will reduce the tax liability of good citizens, individual contributors who make a decent living in India.