A recent SBI research report offers an interesting insight into the dichotomous nature of Odisha’s labour market. Analysing the latest Periodic Labour Force Survey, the study reveals that the eastern state features in the same band as Karnataka and Tamil Nadu on the Work Quality Index. Such a placement on this index, which takes into account factors such as written job contracts, social security benefits and paid leave, reflects higher labour force participation and a more assured employment quality. Yet, Odisha also figures among the states with the highest incidence of minimum wage violations, with compliance at just 66 percent, placing it near the bottom between neighbouring Chhattisgarh and Jharkhand.
Much of this is attributed to the dominance of the agriculture sector, which engages a large section of the informal workforce, which is estimated at nearly 70 percent of the total. Women account for a larger share of this vulnerable workforce that faces weaker wage protection. The greater the dependence on itinerant labour, the higher the incidence of wage violations.
A comparison of minimum wages across states shows that Odisha has consistently lagged behind the likes of Gujarat, Kerala, Tamil Nadu, Karnataka, Maharashtra and Delhi. This also partly explains the high rate of migration from Odisha to these states. Viewed from a social perspective, women and workers from Dalit and other backward communities are more likely to be employed in the informal sector than others. The kind of work offered in the informal sector, along with its poor wage compliance and weak social security, also expose workers to exploitation. According to information tabled in the Odisha Assembly, more than 400 migrant workers from Odisha have died while working in other states over the last nine years. The figure possibly captures the scale of the problem only partially as reports of exploitation surface every year.
The solution lies in stronger labour enforcement and improved productivity. In the long run, more formal jobs in expanded manufacturing and services sectors may provide a sustainable remedy. Wage growth is often linked to industrial competitiveness, and Odisha still has considerable ground to cover compared to southern and western states. Nevertheless, the eastern state’s continued focus on manufacturing, logistics, mining, seafood processing, textiles and construction has the potential to gradually alter the labour market dynamics.