Reading Comprehension Passage: 67 | 100 RC`s for Government Exams Preparation - Bank Exams PDF Download

Directions: Read the passage and answer the questions that follow:
The cabinet recently approved the Code on Wages Bill, which proposes to make minimum wages a statutory right for all citizens. The Bill, which was tabled in Parliament in the monsoon session, proposes a monthly minimum wage to be set across India, which will be binding on all the states. Once it is passed, the states cannot set a minimum wage lower than the one set by the Central government. The proposed Code on Wages will subsume four extant Acts: the Minimum Wages Act of 1948, the Payment of Wages Act of 1936, the Payment of Bonus Act of 1965 and the Equal Remuneration Act of 1976.
Enacting labour reforms is always a herculean task and successive governments have shied away from it. Even the great wave of liberalization of 1991 did not include any factor market reforms. The proposed wage code Bill is the first serious venture in labour law reform by the current government.
Though the actual minimum wage is yet to be set by the Central government, there are indications that it will be significantly higher than the current wage rate. This will invariably result in either retrenchment of employees or a significant slowdown in new hiring or both. Economic theory suggests that a price floor, such as a minimum wage, which mandates how low a price can be set, always results in excess supply of that good or service. 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.