Wage Dispersion and the Loss-Wage Model: The Case of Bowbazar Gems and Jewellery Industry in Kolkata

Abstract

The wage determination in the formal set up and fixation of wages in the mainstream mechanism does not appear with informal production of the Gems and Jewellery industry. In absence of effective machinery for settlement of disputes for wage determination, the industry has introduced an informal mode of operation, i.e. the loss-wage model. The application of the model has improved industrial relations and phenomena improvement in industrial dispute mostly over wages leading to substantial gain in production. This paper is an attempt to study how the process of wage determination and forms of wages in case of informal industries may solve such disputes. The study is confined to the empirical analysis of the Gems&Jewelleryindustryof Bowbazarin West Bengal. The analysis attempts to detect intra-location wage variation within the industry and the reason for such spatial wage dispersion with the help of the loss-wage model. Such a wage determination often is outside the conventional institutional frame of the mainstream market, collective bargaining or influences of trade unions Therefore, multiple modes of wage payments are observed as a vital consequence. The Gems and Jewellery industry exhibits a unique mode of wage payment in the form of wage-loss which is the aim of this paper to be explored.