• Daily two-way transportation – Rs 30
• Three meals a day, forgoing your meat/egg preferences – Rs 150
• Monthly rent for a cramped-up room – Rs 1,800
This way, your basic monthly costs of living in Kathmandu without even considering the bills for water, electricity and communication in your long list of payables already amounts to Rs 7,200 (US$84.06).[break]
But your legally justified monthly minimum wage is only Rs 6,200 (US$72.38) which, too, is, if you happen to be employed and enjoy a legally fair workplace. To survive, it seems, you will have to abstain not just from your preferences but even the basic necessities of life.
And at the state’s end, even getting to that amount level has been a struggle. Until April 2011, the minimum wage as per Nepal’s labor law was just Rs 4,600 per month and following constant collective demands from several trade unions, it was raised to Rs 6,200, an amount with which making ends meet is still a dire situation.
A discouraged Prawin Pokharel (name changed) left his job as a lower secondary school teacher a month ago. The reason – even after working at the school for three continuous years, all he earned was Rs 4,800 (US$56.04) a month.
“What can you do with that amount in an expensive city like Kathmandu?” Pokharel’s voice strains as he vents out his frustration. “Nothing! But no matter how many times we requested for a raise, all we were given were nods and if we were lucky, a raise of Rs 200 to Rs 300 starting the next academic year.”
Working without any appointment letter or contract, Pokharel shares, the staff had to worry about their job security, especially with the unpromising job market in Nepal.
So despite the low pay, most of the staff never spoke up and without the collective support to back him up, Pokharel gave up fighting for a raise and quit.
Umesh Upadhyaya, General Secretary of the General Federation of Nepalese Trade Unions (GEFONT) adds that workers staying silent despite exploitative and unfair labor practices by the employers in fear of losing their jobs have been a common scenario in Nepal for years.
“In many private factories and informal sectors, the employers still run the workplace as per their own rules and the workers have to agree to all they say. If they don’t, they’re not paid for months or even fired from the job,” he adds.
Because of such circumstances, he says, a healthy employer-employee relationship in an understanding of benefiting each other or taking the workers as partners instead of slaves still hasn’t been maintained.
Besides the monthly minimum wage, currently the minimum daily wage has been fixed to Rs 231 for non-agricultural workers, Rs 220 for agricultural workers, and Rs 198 for tea estate workers. As per the provision in labor laws, organizations and workers can then agree on a fixed wage on the basis of collective bargaining.
According to previous reports, even the implementation of the minimum wage structure has been a challenge due to the lack of adequate resources and proper mechanism to monitor the labor standards.
A recent trend in agriculture and construction market however shows that in some places, due to shortage of labor, they are being paid quite well compared to other sectors.
Murad Ali, 30, who has been working as a mason for 15 years now is currently paid Rs 700 daily. “It differs from contractors to contractors though and it’s not a guarantee we’ll have jobs everyday of the year,” Ali shares.
Right next to the complex where Ali works is another construction site and Sumitra Bhujel, a helper there, has a different story to tell.
“Here, I get Rs 300 a day but some places used to pay me even less than Rs 250.”
Nabin Rai, 24, another construction worker, adds, “Three hundred Rupees as daily wage leaves no saving. Moreover, construction work is dangerous and there should be some kind of accidental insurance.”
With massive numbers of young labor force migrating abroad for work every year, Rai says that even he would consider it if there was an opportunity.
According to Dr Shiva Sharma, General Secretary at National Labor Academy, while a decade ago the labor force migrating out were 50 to 60,000 every year, the numbers have now crossed 400,000.
On one hand, he says, the labor shortage may have temporary benefits such as increase in remittances, in the long term, once the economy of Nepal picks up, there will also be a severe shortage here.
“Migration has been providing better opportunities for our labor force, so it should not be discouraged entirely,” says Sharma. “But the government also should plan on how it can create favorable labor market here to retain and utilize the remaining labor force.”
One of the major requirements for that, experts agree, is to at least have a minimum wage, revised over time, so that it can meet the basic necessities of workers. However, the revision process itself has been grueling in Nepal.
In 2011, major trade unions, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the government sat down for an agreement of minimum wage three times.
The first agreement in March decided on Rs 6,100, but the government raised it to Rs 6,200 in April, after which FNCCI went on protest and finally on September 27, settled for the April decision.
Emphasizing that the minimum wage is still too low, Salik Ram Jamarkattel, chairman of All Nepal Federation of Trade Unions (ANFTU), says, “Our initial demand was a minimum of Rs 10,000 but we had to settle for Rs 6,200. But, with the prices of commodities rising at a constant pace, it is important that minimum wage revisions are made considering the rate of inflation.”
Economist Dr Chiranjivi Nepal points out if you consider the inflation rate in Nepali market, within the last five years it has increased by almost 50 percent. At such a rate, the purchasing power of workers with such minimum wage has become negligible.
“In that view, the minimum wage of workers in Nepal is too low and not at all feasible,” Nepal says. “But you also have to consider that labor wage also has to do with the productivity of the workers.”
According to him, productivity of Nepali workers compared to international labor force is still very low.
Unless labor productivity increases, even employers can’t afford to provide higher wages. Unions can keep pressurizing but if the productivity is less, industries will not be able to function and investors will have no alternative than to shut down, resulting in further unemployment.
“The focus should be on increasing the productivity of the labor force by providing them with necessary trainings and skills,” stresses Nepal. “This will not only make them more competitive in the domestic market but internationallyas well.”
As two thirds of the Nepali labor force entering the international labor market is still unskilled, the situation remains that even abroad, they are paid much less than their international counterparts.
But with rising problems of shortage in labor force in agricultural sector that contributes almost 30 percent of Nepal’s GDP, Sharma stresses that labor reforms in the coming years are to be crucial.
“In rural sector, where most of the labor force remains jobless for almost half of the year, the government has to come up with employment guarantee schemes like employing them in developmental works such as road construction or tree plantation. But that can only happen if we have strong economic backup and political commitment.”
Furthermore, with unfair practices, ineffective implementation of labor standards and outbursts in forms of strikes, for a reform in Nepali labor market, several trade unions have proposed an idea of a National Labor Commission.
According to advocate Ramesh Badal, the tripartite system with representation from the workers, investors and government is proposed to be a quasi-judicial institution that can address all labor issues.
“Most cases of workers’ demands turn into strikes as they can’t afford to take the tribunal method. None of the labor court cases have cost less than Rs 500,000 and that’s huge money. Moreover, court cases also take a long time,” says Badal. “So such a quasi-judicial system can deal with workers’ issues more effectively for prompt justice.”
Upadhyaya adds that the Commission will also introduce the much needed labor inspection system in the country. It will check if the labor standards have been met in the working places as well as help in policy formation and revision in labor laws.
“Our system is still capitalist-influenced and not labor-friendly,” says Upadhyaya. “The labor and employer relationship has to improve and transparent working conditions are essential.”
The concept of minimum wages and labor rights has been in Nepal since as early as 1965, during the Panchayat period. However, despite coming into a democratic age, due to political instability and unwillingness to let go of a feudal attitude and profit hunger in the sectors concerned, workers still have to suffer.
In recent years, Upadhyaya says, the unhealthy relation between trade unions, who were supposed to be fighting for labor justice, also created a setback. But it is essential to work together – not just for workers’ associations but the employers’ and the government’s as well.
Exchange rate as of 29 December 2011.
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