Will minimum wage lead to minimum jobs?

"The cabinet recently approved the Code on Wages Bill, which proposes to make minimum wages a statutory right for all citizens," wrote Puri and Manur. The bill seeks to incorporate various laws on wages passed in 1936, 1948, 1965 and 1976. But it will be a big mistake. "Seminal work by Nobel Prize winning economist George Stigler concludes that a minimum wage does not satisfy its original intentions -- elimination of poverty -- and will tend to increase unemployment and reduce family income." So, will it be a single figure across all of India, easily understood and simple to enforce? Of course, not. "The Bill recognises that a universal minimum wage across India and across different sectors does not work and proposes that the minimum wage set can be augmented based on the skill required, the arduousness of the work assigned to the worker, geographical location of the place of work and other factors which the appropriate government considers necessary." Who will decide what is fair wage? It will be done by "any number of committees and sub-committees". Which means juicy sinecures for retired civil servants and a chance to earn extra money on the side from employers and unions alike. Wonderful. Like the Goods and Services Tax, which was supposed to simplify indirect taxes, has 5 rates, varying cess on luxury or sinful goods. Besides, gold has a GST of 3%, a GST of 5% on making charges and a 10% customs duty. Why so complicated? Because, it gives civil servants untold opportunities to add to their incomes. Who drafts these bills? Civil servants. Minimum wage has to be set at a high rate to tempt people, enjoying life on MGNREGA, to work. A study by S Agarwal et al showed that "factory jobs have declined by 10% and mechanisation has increased by 22.3% as a result of implementing MGNREGA". As it is, manufacturing in India contributes just 15% of GDP, and unless it grows to 25-30% of GDP it cannot create enough jobs for our ever increasing population. Trouble is that industry in India is capital intensive and may become more so by increasing automation if minimum wages are increased. A UNDP report suggests that lack of jobs is likely to increase in the next 35 years. Higher wages will increase the price of goods. Already cheap Chinese imports are flooding into India because the rupee is so strong compared to the yuan. The situation must be dire if the number of young people looking for work is declining. Lack of ideas is so easy.