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Real monthly wages for both male and female salaried and self-employed workers in 2023-24 were lower than pre-pandemic levels in 2017-18, the latest Economic Survey showed. The Survey also noted that while corporate profitability soared to a 15-year high in 2023-24, growth in wages has “lagged”.
“While the labour share of GVA (gross value added) shows a slight uptick, the disproportionate rise in corporate profits – predominantly among large firms – raises concerns about income inequality. A higher profit share and stagnant wage growth risk slowing the economy by curbing demand. Sustained economic growth hinges on bolstering employment incomes, which directly fuel consumer spending, spurring investment in production capacity,” the Survey said.
Among the salaried, real average monthly wage for male workers in 2023-24 was Rs 11,858, down by 6.4 per cent from Rs 12,665 in 2017-18. For female workers, real wages fell more sharply by 12.5 per cent to Rs 8,855 from Rs 10,116 in 2017-18.
Among self-employed male workers, real wages dropped by 9 per cent to Rs 8,591 in 2023-24 from Rs 9,454 in 2017-18. For self-employed female workers, real wages plummeted by 32 per cent, from Rs 4,348 to Rs 2,950. The real wages, which are adjusted for inflation, have been calculated by dividing nominal wages by retail inflation, the Survey said.
Wages lagged even as “profits surged”, with corporate profitability soaring to a 15-year peak in 2023-24 on the back of robust growth in financials, energy, and automobiles, the Survey said. “Despite Indian companies achieving a stable EBITDA margin of 22 per cent over the last four years, wage growth has moderated. This uneven growth trajectory raises critical concerns. Wage stagnation is pronounced, particularly at entry-level IT positions,” it added.
“A striking disparity has emerged in corporate India: profits climbed 22.3 per cent in FY24, but employment grew by a mere 1.5 per cent. State Bank of India (SBI) analysis reveals that 4,000 listed companies recorded a modest 6 per cent revenue growth. At the same time, employee expenses rose only 13 per cent – down from 17 per cent in FY23 – highlighting a sharp focus on cost-cutting over workforce expansion,” the Survey noted.
In nominal terms, wages for salaried male workers grew by 27.7 per cent between 2017-18 and 2023-24 to Rs 22,092. For salaried women workers, it grew by 19.4 per cent to Rs 16,498.
Nominal average wages for self-employed male workers grew by 24 per cent to Rs 16,007, whereas for self-employed female workers, it dropped by 7.4 per cent to Rs 5,497 from Rs 5,935.
