Dr. Aykroyd’s formula is associated with determination of

Correct — B, (b) minimum wage. Dr. Wallace Aykroyd was a nutritionist, not a wage economist, and that is the key to the item. He headed the Nutrition Research Laboratories at Coonoor and later became the first Director of the Nutrition Division of the Food and Agriculture Organization, and his contribution to wage fixation was a calculation of what a person actually has to eat: a net intake of 2,700 calories a day for an average Indian adult in moderate activity, made up of a balanced diet of cereals, pulses, vegetables, milk, oil and sugar. Once you can cost that diet, you can cost a wage floor.

That is what the Fifteenth Session of the Indian Labour Conference did in 1957. It took Aykroyd’s calorie standard as its second norm and built the need-based minimum wage around it, laying down five norms in all: three consumption units for one earner, the earnings of women, children and adolescents being disregarded; a net food intake of 2,700 calories per average Indian adult; clothing at eighteen yards per person a year, that is seventy-two yards for a family of four; rent corresponding to the minimum area provided under the Government’s Industrial Housing Scheme; and fuel, lighting and other miscellaneous items of expenditure at twenty per cent of the total minimum wage. The Supreme Court added a sixth in the Reptakos Brett case of 1992: children’s education, medical requirement, minimum recreation including festivals and ceremonies, and provision for old age and marriage, to constitute a further twenty-five per cent.

So Aykroyd’s formula answers a question of subsistence and efficiency — what a worker must consume to stay alive and fit to work — and subsistence and efficiency are the content of the minimum wage, not of any wage above it. The Committee on Fair Wages set up in 1948 put it in the words the courts still use: the minimum wage ’must provide not only for the bare sustenance of life, but for the preservation of the efficiency of the workers’. A formula that prices calories, cloth, rent and fuel is a formula for exactly that floor.

Why the others are wrong

• (a)fair wage — A fair wage is the middle rung of the Committee on Fair Wages ladder: above the minimum, below the living wage, and fixed with an eye on what the industry can actually pay as well as on what the worker needs. Its determinants are therefore comparative and financial — prevailing rates in similar occupations in the same region, the productivity of the industry, its capacity to bear the burden, the level of the national income. None of that is a nutritional calculation, and Aykroyd supplied nothing that would help fix it. The distinguishing question is whose circumstances the standard looks at: the minimum wage looks only at the worker’s needs, the fair wage also at the employer’s capacity.
• (c)living wage — A living wage is the highest rung, and Article 43 of the Constitution names it as a goal — the State is to endeavour to secure to all workers a living wage and conditions of work ensuring a decent standard of life. It goes beyond subsistence and efficiency to frugal comfort: education for the children, protection against ill health, essential social needs and some insurance against misfortune and old age. Because it depends on what the economy can afford at a given stage of development, it has always been treated as an aspiration rather than as a figure to be computed. Aykroyd’s diet-costing exercise fixes a floor; it says nothing about frugal comfort, and it is not the tool for the ceiling.
• (d)real wage — A real wage is not a rung on that ladder at all — it is an economic measure rather than a legal standard. The money wage is the number of rupees paid; the real wage is what those rupees will buy, the money wage deflated by a price index, and it can fall while the money wage rises. Aykroyd’s formula does bear on prices, because the notified minimum has to be recomputed as the cost of the diet changes and because the Minimum Wages Act builds in a cost of living allowance for that purpose. But that is the mechanism for maintaining a minimum wage in real terms, not a method of determining a real wage, which is simply calculated and never fixed by anybody.

Indian wage policy works with a ladder of three statutory standards and one economic measure. The Committee on Fair Wages, appointed by the Government of India in 1948, set out the ladder. The MINIMUM WAGE must provide not only for the bare sustenance of life but for the preservation of the efficiency of the worker, and so must cover some measure of education, medical requirements and amenities; it is fixed without regard to the employer’s capacity to pay, because a business that cannot pay it has no right to operate on those terms. The FAIR WAGE sits above the minimum and is fixed with an eye on the industry’s capacity to pay, on productivity and on prevailing rates in comparable employments. The LIVING WAGE is the highest rung, adding frugal comfort — education, protection against ill health, social needs, insurance against old age — and Article 43 of the Constitution sets it as a Directive Principle. The REAL WAGE is not on the ladder: it is the purchasing power of the money wage. Aykroyd’s contribution sits at the bottom rung and makes it computable. The Fifteenth Indian Labour Conference of 1957 turned his 2,700-calorie standard into the need-based minimum wage norms — three consumption units, 2,700 calories, seventy-two yards of cloth a year for a family of four, rent at the Industrial Housing Scheme level, and twenty per cent of the total for fuel, lighting and miscellaneous items — and the Reptakos Brett judgment added a sixth norm worth a further twenty-five per cent in 1992. The Minimum Wages Act, 1948 gives the floor its legal force, and the Supreme Court in Bijay Cotton Mills Ltd. v. State of Ajmer upheld sections 3 to 5 of that Act as reasonable restrictions saved by Article 19(6), imposed in the interests of the general public and to carry out Article 43.

Key facts

• Dr. Wallace Aykroyd’s formula underlies the need-based MINIMUM wage, not the fair, living or real wage.
• Aykroyd headed the Nutrition Research Laboratories at Coonoor and was the first Director of the Nutrition Division of the Food and Agriculture Organization.
• His standard is a net intake of 2,700 calories a day for an average Indian adult engaged in moderate activity.
• The Fifteenth Indian Labour Conference, 1957, adopted five norms for the need-based minimum wage: three consumption units per earner; 2,700 calories per adult; 72 yards of cloth a year for a family of four; rent at the Government’s Industrial Housing Scheme level; and 20 per cent of the total for fuel, lighting and miscellaneous items.
• In Workmen v. Reptakos Brett and Co. Ltd. (1992) the Supreme Court added a sixth norm — children’s education, medical requirement, minimum recreation including festivals and ceremonies, and provision for old age and marriage — at a further 25 per cent.
• The Committee on Fair Wages (1948) defined the minimum wage as one that provides ’not only for the bare sustenance of life, but for the preservation of the efficiency of the workers’.
• Article 43 of the Constitution directs the State to endeavour to secure to all workers a living wage and conditions of work ensuring a decent standard of life.
• The real wage is the purchasing power of the money wage — an economic measure, not a standard that any authority fixes.

Common traps

• Attaching Aykroyd to the living wage because his norms sound generous. They are subsistence norms — calories, cloth, rent, fuel — and they fix a floor.
• Confusing the real wage, which is measured, with the three wage standards, which are fixed by an authority.
• Reciting the 15th Indian Labour Conference norms as four or six. There were five in 1957; the sixth came from the Supreme Court in 1992.
• Reading the clothing norm as 72 yards per person. It is 18 yards per person per year, which is 72 yards for a family of four.
• Spelling variants: the nutritionist’s name appears in Indian official documents as both Aykroyd and Akroyd, and a question may print either.

• practice — not a real PYQ

  According to the norms adopted by the Fifteenth Indian Labour Conference in 1957, fuel, lighting and other miscellaneous items of expenditure should constitute what proportion of the total minimum wage?

  • (a)10 per cent
  • (b)20 per cent
  • (c)25 per cent
  • (d)33 per cent

  Answer(b) 20 per cent

• practice — not a real PYQ

  Which of the following wage concepts is described as one which must provide not only for the bare sustenance of life but also for the preservation of the efficiency of the worker?

  • (a)Living wage
  • (b)Fair wage
  • (c)Minimum wage
  • (d)Money wage

  Answer(c) Minimum wage