Low wages are holding women back from formal employment – 54 per cent of blue- and grey-collar women employees are unhappy with their pay and 80 per cent saving nothing or less than Rs 2,000 per month, according to a new report.“Income is a make-or-break factor driving women’s exit from the blue-grey collar workforce,” the report by Quess Corp, India’s largest staffing firm, and the Udaiti Foundation, said. “Women already face steep opportunity costs to join the workforce. Inadequate wages that ignore local realities simply drive them out,” it added, flagging a “clear gap between minimum wage and living wage”.The need to align minimum wage with real living costs has also gained traction among top policymakers. The Union Ministry of Labour and Employment, for instance, is discussing the concept of a living wage, which factors in expenditure on health and education that is currently excluded from minimum wage calculations. According to Vandana Gurnani, Labour and Employment Secretary, accounting for health- and education-related expenses in wage standards could “reduce the opportunity cost” women face when entering formal employment.Low pay, high costs push women outThe report found that blue- and grey-collar women employees earn just 70 per cent of what men do, and that low wages, combined with high opportunity costs like unpaid caregiving, time lost to commuting, or the cost of migration, make it difficult for women to “sustain at work”.Based on a survey of over 10,000 current and around 1,600 former women employees at Quess, it said workers in peri-urban zones, which host significant manufacturing activity, often have minimum wages that lag behind urban benchmarks, despite high living costs.“Costs are higher in Tier 1 cities, but 1 in 5 women earn below INR 20,000, which is typically the stipulated minimum wage… Those earning above INR 20,000 are 21% less likely to drop out in the near term, showing that better pay supports retention,” it said.Quess provides staffing and outsourcing services to over 3,000 clients across sectors like retail, IT, manufacturing, and banking.Story continues below this adAt the launch of the report on July 24, Gurnani said, “Conceptually, it’s very good if you go beyond nutrition, housing, and clothing, which are currently counted for minimum wage, to expenditure on health and education, which is proposed.”“From a women’s perspective, it is very important because the care model, like childcare, is going to cost them. (Inclusion of health and education) will reduce the opportunity cost that women face when they come out to work,” she said.Gurnani added that the ministry is figuring out how to “do this in a diverse setting because things vary from state to state”. She also highlighted the need for a “social dialogue” with employers and employees.“So, it is currently at that stage. It is not happening today, but I am glad that we started thinking about it,” she said.For women, wages only part of the problemStory continues below this adWhile living wage standards would benefit all workers, the impact could be more significant for women, who face higher opportunity costs. This is particularly relevant given India’s low female labour force participation rate (LFPR) – just 32 per cent for women above 15 years as of June, compared to 77.1 per cent for men, according to the Periodic Labour Force Survey (PLFS). Several economists argue that India’s female LFPR must cross the 50 per cent mark if the country is to achieve developed economy status.In addition to low wages, women workers also contend with poor work culture, limited access to safe and affordable housing, and mobility constraints. In some states, regulatory barriers add to the challenge.“There are 54 laws that actually prohibit women from participating in the workforce. Among them are the night shift laws, which are now being removed state by state,” said Pooja Sharma Goyal, founding CEO of Udaiti Foundation.“What happens when you dismantle night shift laws is that the private company becomes responsible for ensuring a woman’s safety on her way home at night. That includes providing transport. Now, many large companies are able to provide that, while the small ones are not. Those are some of the nuances we need to start thinking about,” she told The Indian Express.Industrial hubs draw more womenStory continues below this adAccording to Guruprasad Srinivasan, CEO of Quess Corp, a state’s industrial base – particularly its manufacturing strength – is a key driver of higher female workforce participation.“Tamil Nadu hosts many large, modern electronics and manufacturing units, followed by states like Karnataka and Maharashtra. With higher workforce participation in manufacturing, these states naturally absorb more women workers,” Srinivasan said.“High finger dexterity and hand-to-eye coordination are areas where women tend to do well. We test these skills, and more women pass than men. So naturally, there’s demand for them in sectors like electronics and auto manufacturing. The semiconductors sector is another space to watch,” he said.