Low Wages and High Costs: Challenges Faced by Women in India’s Workforce

Context

A recent report by Quess Corp in collaboration with the Udaiti Foundation highlights the persistent challenges faced by blue- and grey-collar women workers in India. Despite efforts to improve labour participation, women continue to struggle with low wages, high opportunity costs, and structural barriers that discourage sustained engagement in formal employment.

Introduction

The economic contribution of women is crucial for inclusive growth. However, a large section of women in India’s blue- and grey-collar workforce remain underpaid and undervalued. The latest findings indicate a pressing need to rethink wage structures, address regulatory hurdles, and create supportive work environments to boost women’s participation in the formal sector.

Wage Dissatisfaction and Savings Gap

• Over 50% of women workers in blue- and grey-collar jobs report dissatisfaction with their low wages.

• 80% of them save less than ₹2,000 per month, reflecting their limited financial security.

• The combination of low earnings and high living costs leads many women to exit formal employment, especially when weighed against the opportunity costs such as unpaid caregiving and travel time.

Gender Pay Gap and Employment Challenges

• Women in these roles earn only 70% of the wages received by men for similar work.

• Blue-collar jobs involve manual labour, while grey-collar roles demand technical skills.

• In peri-urban manufacturing areas, women face lower minimum wages despite higher living expenses.

• 1 in 5 women earn less than ₹20,000 per month, the typical minimum wage in Tier-1 cities.

• Women earning above ₹20,000 are 21% less likely to quit, underscoring the importance of better pay in retaining female workers.

Minimum Wage vs. Living Wage

• There is a wide gap between the statutory minimum wage and the actual living wage needed to afford essentials such as food, housing, healthcare, education, and financial stability.

• Minimum wages are legally mandated but currently account only for nutrition, housing, and clothing.

• A living wage, in contrast, is calculated based on the actual cost of living in a given region and ensures dignity and financial security for workers and their families.

Government Initiatives to Redefine Wage Standards

• The Labour Ministry is exploring the possibility of including health and education expenses in the minimum wage framework.

• From a women’s perspective, such inclusions would reduce the opportunity cost of employment, especially in contexts involving childcare and healthcare.

• Experts highlight the implementation challenges in a diverse country like India and stress the need for tripartite dialogue involving the government, employers, and employees.

Structural Barriers to Women’s Workforce Participation

• India’s female labour force participation rate (LFPR) is at 32%, compared to 77.1% for men.

• Structural issues beyond wages hinder women’s entry and retention in the workforce. These include:

  • Lack of safe or affordable housing

  • Poor workplace environments

  • Limited mobility

  • Regulatory restrictions

• 54 existing laws restrict women’s employment, including bans on night shifts.

• While reforms are underway, the burden of ensuring women’s safety—especially in night shifts—often falls on employers, a challenge for small businesses.

Role of Industrial States in Promoting Female Employment

• States with strong manufacturing ecosystems, such as Tamil Nadu, Karnataka, and Maharashtra, lead in female workforce participation.

• Sectors like electronics and automotive manufacturing actively recruit women due to their skills in finger dexterity and coordination.

• These industries demonstrate how sectoral demand can drive female employment when matched with appropriate policy support.

Conclusion

The findings underline the need for comprehensive reforms to bridge the wage gap, redefine wage standards, and remove systemic hurdles that limit women’s participation in the workforce. Ensuring decent pay, secure work conditions, and gender-responsive policies will be essential for unlocking the full potential of India's female labour force.