The Shaken Global Wage Scale

GurgaonWorkersNews no.28 (July 2010)

*** Misery is Relative / Comparison of Minimum Wages in Delhi and London -

The following text is devalued with increasing speed: the global crisis and subsequent struggles shake the global wage scale. In June 2010 the INdian government ‘free-floated’ the petrol and diesel prices, fueling the already double-digit inflation. In the UK the government increased the VAT by 20 per cent and cut wage-subsidising benefits. The collapsing Euro inflates the Rupee. The struggles in China and Bangladesh put pressure on wages in the global low-income zones. We will see whether class struggle and crisis will re-shape the global wage-division, old concepts like ‘workers’ aristocracy’ and most of the concepts of ‘integrated’ working-classes ‘in the imperialist nations’ will help little to understand. We need global proletarian debates.

The following ‘relative’ comparison of Delhi and London minimum wages and their respective purchasing power would be a rather tedious endeavor if seen as a purely statistical enterprise or poverty competition. It would result in the usual ‘statistical findings’, e.g. that if you are inclined to become a well-groomed truck-driver with a passion for cheap daily newspapers and road-side cups of tea you should move to Delhi; whereas for any other reasons you should make it to or stay in London – if you can – because you will earn roughly four and a half times as much in terms of purchasing power. If you were a textile company manager looking for low wage zones your perspective might be a little more blunt. You would compare the absolute wage difference between a potential minimum wage worker in London’s East End (around 1,200 GBP per month) and those of a worker in Delhi’s Okhla industrial zone (around 76 GBP per month). The fact that in absolute terms the London wages are about sixteen times higher will make investment decisions a fair bit easier.

We compare the workers’ wages to consumer goods and services. This in itself will tell us little about the actual social position we find ourselves in once we depend on this wage and have to sell our labour power for it. How does our wage compare to the income of people in the city around us? Will we feel ‘excluded’ from wider social life and life-styles? How does the wage compare to the general ‘productive social wealth’, the material power to set in motion bodies and minds for profitable purposes or mass destruction? We compare wages which are set by two different states, wages which are defined as ‘minimum’ in terms of the local, moral, historic minimum level of reproduction for a worker. One local context is the capital of an ‘ex-colony’, the capital of a developing country, the regional centre of an emerging global industrial cluster. The other local context is the capital of an ‘ex-empire’, the centre of historical Industrial Revolution, with 250 years of industrial working class history. The centre of world finance, real estate bubbles and a declining manufacturing base. This also means that Delhi area is dominated by a work-force which – in general sense – knows how many acres of wheat you can reap in a certain amount of time or how many shirts or metal parts a worker can produce per day. Productive workers from mainly rural backgrounds have a rough notion how their productivity relates to wages they receive and prices they have to pay. London is characterised by mainly ‘unproductive labour’: a cleaner might know how much money their company charge the client, they know about exploitation on an immediate level, but less on a social scale.

Workers’ wages and their consumption level tell us something about the ‘stage of capitalist development’, if we agree that one of the characteristic outcomes of industrial working class struggle is that after the class wars of mining, railway building and machine and weapon manufacturing workers a following generation of workers is able to buy ‘industrial goods’ in form of long-lived consumption goods like radios, fridges or washing machines. We also have to mention the ‘sources’ of our consumer products. In Delhi we refer to the most common trade-form for basic food items, vegetables or durable consumer goods: small traders. The prices in London are based on prices of large super-market chains for daily goods and internet price comparisons for durables – because this is how proletarians shop in general. We leave it to a different research to find out whether the demise of small traders and the consequent drop of general wage level due to increased competition will be compensated by ‘cheaper’ large-scale and ‘more direct’ trading.

When we compare London-Delhi wages relative to food items, the London wages are about five to six times higher, if we compare them in relation to the mentioned ‘durable consumer articles’, London wages are fifteen times higher. The astonishing fact is the relative ‘expensiveness’ of agricultural goods’ in India, compared to ‘basic manufactured items’: While I can buy five times as much rice of my London minimum wage, I can ‘only’ buy three times as many shirts or shoes. This is only partly due to higher relative petrol prices in India, which form a decent chunk of food prices. Apart from room rents – which are a peculiar issue – it is personal services such as cooked food or hair cuts where a minimum wage in Delhi can command as much personal service labour as the wage in London. This tells something about the low levels of service proletarian wages in the Indian metropolis! Out of good attitude we put ‘global goods’ into the equation, e.g. Nescafe, Mc Chicken, Nokia mobile phones or IPods. We can see that the ‘wage division’ widens when it comes to these ‘global goods’ – which doesn’t mean that the Delhi young proletarian would not have access to the ‘use value’ of these goods. Let’s not argue about the use value of a McChicken, but of Chinese Fake-Brand MP3-Players or Handy-Cams. Apart from the ‘old school’ consumer durables like fans, gas-cookers and bicycles, the modern proletarian in Delhi owns a mobile phone with gadgets. We suggest the thorough article on Sanahati: “Do 600 Million Cellphones Make India a Rich Country”

http://sanhati.com/excerpted/2388/

But let’s stick to the basics: the level of minimum wage as means of reproduction for a worker. Behind this phrase a political field of question opens up. In London the nominal/direct wage does not cover reproduction, in the sense that in case of illness, unemployment, old age the state has to guarantee an additional part of income. The London minimum wage is hardly a ‘family wage’: the state has to top up in terms of child benefits etc. In Delhi these ‘welfare provisions’ only exist on paper, in 90 per cent of cases workers won’t get unemployment or pension money, neither health care. For most workers in Delhi the minimum wage has to cover parts of these future or ‘accidental’ costs. In a purely economical sense we would have to add these monetary benefits or service costs to the London minimum wage. On the other hand a London worker is very likely to be ‘fully proletarianised’ in the sense that s/he hasn’t got a ‘second home’ in a village and no access to – however small – a piece of land and wider family network which could act as a basic security net. We can argue whether it is not the other way around – that the urban wage has to finance the maintenance of the small piece of land and the rural family members. Fact is that many workers in Delhi industrial areas try to save money – first of all on rent – in order to be able to ‘save money for the home’. Ideally a ‘single worker’ – who is either unmarried or whose family lives in the vilage’ will try to save half of his or her monthly wage. The most common life perspective – or illusion – is that the urban industrial wage work is a temporary stage and that there is a future as semi-peasant / shop-keeper etc. in the village.

When it comes to rent and living arrangements the ‘village’ plays a role. In London only ‘migrants’ would stay five people to a room, no separate kitchen – which is the norm in Delhi, not only for families, but also for unrelated young workers. In this way they can drop the rent share of their total wage to under 10 per cent. In London you might rent a room in a shared flat, giving you access to a kitchen and a toilet, which will cost you around 50 per cent of your wage. In the relative wage comparison we took all three different scenarios into account: comparing the most common set-up; comparing ‘a single worker’ to ‘a single room’ according to the respective local ‘workers’ housing standards’; comparing ‘a single worker’ to ‘a single room’ according to London housing standards. The main obvious result is that compared to other ‘goods’ rent in London is relatively high and the main reason for why the relative wage levels are ‘only’ four to five times higher. Who would have thought?! At this point the quantitative state of mind leaves us clueless: Is it expression of a higher living standard to live in a London Stratford bed-sit, while your two-weeks dead neighbour starts to send his whiffs through the mortar?

What about the ability of workers in Delhi and London not only to be a categorial part of global working class formation, but to take part in it in a physical and communicative way. We can compare costs for flights Delhi-London and costs for an hour spent on the internet and we can see that a flight belongs to the ‘fridge/washing machine’-category out of reach for most Delhi workers, while the internet is closer to home. Here again, we reach other forms of exclusion. Even if a worker in Delhi would be able to save money for the flight, that does not mean that s/he will get a visa. Even if a worker in Delhi can surf on the net, the fact that the Hindi sites are still rather insular compared to the ‘global electronic village’ of the the English speaking Indian upper-class is not an ‘economical’ problem. Which does not mean that the worker in Delhi would not have the means for ‘political mass-expressions’, see prices for printing a small newspaper or for sending it by post. On a similar relative price level range the products of ‘knowledge circulation cum mental domestication’ such as daily newspapers or cinema. In terms of access to career paths to leave the minimum wage misery it looks rather bleak for proletarians on both sides of the globe. A truck driving license might be within reach, but won’t solve the initial problem. The worker in Delhi would have to save around 833 years in order to afford the two years fees for a MBA (management degree), while the worker in London might make it in 20 years. Great.

How do these wages relate to themselves in the historical dimension, does the gap close or widen over time? Difficult question. We can assume that since it’s introduction in 1997 the relative minimum wage in the UK fell – which was 3.60 GBP at the time. But did it increase in Delhi? Minimum wage in Delhi 1990 was around 900 Rs. The early 1990s were turbulent times in terms of inflation, up to 18 per cent annual consumer price increase in 1994 to 1996. If we assume an average annual inflation of around 8 per cent for 1990 to 2010 period, the wage of 900 Rs would have had to increase to 4,177 Rs by 2010 to compensate. Here the fundaments of statistics become drift-sand. Since 1990 the share of temporary and casual jobs, the amount of jobs through contractors increased rapidly, while more and more permanent workers lost their jobs. May be the minimum wage has increased in real terms, the general conditions of industrial workers in Delhi have hardly improved. In what kind of ‘working class position’ would a London minimum wage be situated in Delhi? If we take a common commodity basket (rent, food, clothes, transport, consumer goods – according to average share of total wage), we come to a medium wage ratio of 4.5 times higher wages in London. This would mean that the ‘equivalent’ to the London wage in terms of purchasing power would be around 23,400 Rs per month in Delhi. What kind of wage workers in Delhi would earn this kind of wage – which would place them into widely hailed ‘emerging Indian middle-class’? Some call centre workers earn that kind of money. Permanent workers in the automobile industry earn this much, partly more. We can see that major wage differences run within the industrial areas of Delhi as much as within the global working class. We can also see that the ‘wage question’ is everything but an ‘economical question’, but – in the end – a question of social-historical power, of class power. Let’s stop calculating!

But whoever wants to know how we calculated things: We could see a rather shaky exchange rate between Rupee and British Pound during 2009 – 2010. At the end of November 2009 the rate was 1 GBP / 78 Rs. Since then the British Pound steadily declined in value – or rather, the Rupee got appreciated. On 3rd of May 2010 the rate was 1 GBP / 68 Rs. For the total wage calculation we take the minimum wage for industrial helpers in Delhi May 2010 of 5,200 Rs per month based on an 8-hours day and a 6-days working week. We have to emphasise that only a fraction of workers actually get this wage, most workers earn less or have to work considerably longer hours for it. We base the London hourly minimum wage of 5,80 Pounds on the same monthly working times.

Monthly Minimum Wage Delhi: 5,200 Rs / 76.5 GBP
Monthly Minimum Wage London: 81,600 Rs / 1,200 GBP
Exchange Rate 3rd of May 2010: 68 Rs / 1 GBP

Item [Kilo Rice]: Price Rs in Delhi [22 Rs] / Price GBP in London [1.10] – Amount of Items I can buy with monthly wage in Delhi [236] / London [1091] (London Wage this times higher/lower than Delhi Wage [4.6])

Food

Kilo Rice: 22 Rs / 1.10 GBP – 236 / 1091 (4.6)
Kilo Wheat Flour: 14 Rs / 0.3 GBP – 371 / 4,000 (10.7)
Kilo Potatoes: 10 Rs / 0.5 GBP – 520 / 2400 (4.6)
Kilo Pasta: 35 Rs / 0.8 GBP – 149 / 1,500 (10)
Kilo Red Lentils: 48 Rs / 1.2 GBP – 108 / 1,000 (9.2)
Kilo Chickpeas: 80 Rs / 1.3 GBP – 65 / 923 (14.2)
Kilo Sugar: 35 Rs / 1 GBP – 148 / 1,200 (8.1)
Kilo Carrots: 20 Rs / 0.85 GBP – 260 / 1412 (5.4)
Kilo Apples: 40 Rs / 1 GBP – 130 / 1200 (9.2)
Kilo Milk: 26 Rs / 0.75 GBP – 200 / 1600 (8)
Kilo Joghurt: 45 Rs / 2 GBP – 115 / 600 (5.2)
Liter Bottled Water: 12 Rs / 0.7 GBP – 433 / 1714 (4)

McChicken: 52 Rs / 1 GBP – 100 / 1200 (12)
Nescafe 50g: 63 Rs / 1.5 GBP – 86 / 800 (9.3)
0.5 Liter Bottle Coke: 20 Rs / 0.6 GBP – 260 / 2,000 (7.7)
Bottle Beer: 50 Rs / 1.3 GBP – 104 / 923 (8.9)
10 Cigarettes 30 Rs / 3 GBP – 173 / 400 (2.3)

Consumer Goods

Shirt: 150 Rs / 15 GBP – 35 / 80 (2.9)
Shoes: 250 Rs / 20 GBP – 21 / 60 (2.9)
Plastic Bucket: 60 Rs / 3 GBP – 86 / 400 (4.6)
Block Soap: 13 Rs / 0.6 GBP – 400 / 2000 (5)
Second-Hand Bicycle: 500 Rs / 30 GBP – 10 / 40 (4)
Nokia Mobile Phone: 1,500 Rs / 25 GBP – 3.5 / 48 (13.7)
Cheap Television: 5,000 Rs / 30 GBP – 1 / 40 (40)
Flat-Screen Television: 10,000 Rs / 110 GBP – 0.52 / 11 (21.1)
Fridge: 8,500 Rs / 100 GBP – 0.6 / 12 (20)
Washing Machine: 7,000 Rs / 120 GBP – 0.7 / 10 (14.3)
Dell Laptop Inspiron 14: 31,400 Rs / 500 GBP – 0.16 / 2.4 (15)
IPod Classic 80GB: 12,000 Rs / 179 GBP – 0.43 / 6.7 (15.9)
125cc Honda Motorbike Stunner CBF: 57,000 Rs / 2,300 GBP – 0.091 / 0.5 (5.5)
Basic Ford Fiesta 1.6: 650,000 Rs / 12,000 GBP – 0.008 / 0.1 (12.5)

Personal Service

Fresh Squeezed Fruit Juice: 20 Rs / 1.8 GBP – 260 / 666 (2.5)
Tea in Cafe: 4 Rs / 0,8 GBP – 1,300 / 1,500 (1.2)
Basic Meal: 20 Rs / 3 GBP – 260 / 400 (1.5)
Haircut: 20 Rs / 8 GBP – 260 / 150 (0.6)

Housing

Monthly Room Rent (three to a room): 400 Rs / 400 Rs – 13 / 3 (0.23)
Monthly Room Rent (working class room): 1,100 Rs / 400 GBP – 4.7 / 3 (0.64)
Monthly Room Rent (same standard): 5,000 Rs / 400 GBP – 1.04 / 3 (2.88)
Monthly Electricity Bill: 40 Rs / 30 GBP – 130 / 40 (0.3)

Transport

Innercity Bus Journey: 15 Rs / 1.2 GBP – 347 / 1,000 (2.9)
500 km Train Journey: 200 Rs / 60 GBP – 26 / 20 (0.77)
Flight Delhi-London AirIndia: 20,000 Rs / 310 GBP – 0.26 / 3.9 (15)
1 Week Thailand (Mallorca) incl. Flight: 15,000 Rs / 180 GBP – 0.35 / 6.6 (18.8)
Liter Petrol: 48 Rs / 1.2 GBP – 108 / 1,000 (9.3)

Knowledge Circulation

Daily Newspaper: 4 Rs / 1 GBP – 1,300 / 1,200 (0.77)
National Letter Stamp: 5 Rs / 0.41 GBP – 1040 / 2927 (2.8)
Soft-Back Book (Penguin): 200 Rs / 9 GBP – 26 / 133 (5.1)
Cinema: 50 Rs / 7 GBP – 104 / 171 (1.6)
Hour Internet: 15 Rs / 1 GBP – 347 / 1,200 (3.6)
Print of 7000 Copies 4 Pages A4: 4,000 Rs / 400 GBP – 1.3 / 3 (2.3)

Career

Truck Driving License: 1,600 Rs / 1,400 GBP – 3.25 / 0.86 (0.26)
MBA Two Years Fees: 1,000,000 Rs / 49,900 GBP – 0.0052 / 0.024 (4.6)
Three Years Apprenticeship Mechanic: 187,200 Rs (three years no income) / free

4 Responses to “GurgaonWorkersNews no.9/28”


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