In everyday vocabulary, a “floor” is meant to be a foundation – a solid surface that prevents a freefall into the abyss. However, in the political economy of the Indian State, words often perform the opposite of their dictionary function. Rule 11 of the draft Code on Wages (Central) Rules, 2025, which outlines the manner of fixing the “Floor Wage,” is not a mechanism to lift the working class out of destitution. Rather, it is a structural device to flatten the wage hierarchy, undermine federalism, and ensure that the price of labor remains low enough to satisfy the voracious appetite of global capital.To understand the implications of the “Floor Wage”, one must look beyond the stated intent of a “minimum living standard” and examine how it operates within the landscape of competitive federalism and inflationary pressure.The floor becomes the ceilingThe central concern with the Floor Wage is the assumption that it acts merely as a baseline above which states will build. The logic is that the Union government fixes a floor, and state Governments fix their specific minimum wages above it.However, in a neoliberal economy where states compete to attract investment, a low Floor Wage can act as a magnet for capital. If the Centre fixes a Floor Wage that is significantly lower than existing wages in developed states – effectively creating a “distress wage” – it signals the market to gravitate towards regions with lower labour costs.States with higher wage structures, such as Kerala or Delhi, which have achieved better standards through unionisation and social movements, will face pressure from industry lobbies to align with the national “floor” to remain competitive.Consequently, Rule 11 risks validating the lowest common denominator as the national standard. Rather than lifting backward regions, it could exert downward pressure on progressive regions, effectively transforming a “minimum threshold” into a “maximum aspiration” for the unorganised workforce. In other words, it risks nationalising poverty. The five-year inflation lagA critical provision is found in Rule 11(4), which states that the Union government may revise the floor wage “ordinarily at an interval not exceeding five years”.In an economy characterised by volatile inflation, where the prices of essential commodities fluctuate frequently, a five-year interval poses a significant risk to real wages.The worker’s expenditure is immediate. When the price of food or rent increases, the cost is absorbed instantly. However, under this rule, wage correction is tethered to a quinquennial bureaucratic cycle. By the time the government revises the wage, the real value of that money has likely been eroded. The worker is essentially running on a treadmill that is slowing down, while the cost of living is taking an elevator to the top floor. To codify a five-year gap is, in economic terms, to legislate a potential reduction in real wages over time.The abstraction of ‘living standard’Rule 11(1) mentions taking into account “the minimum living standard”. Yet, unlike the specific calorie counts mentioned elsewhere in the Code (Rule 3), the criteria here remain vague.By centralising the power to define this standard, the Rule risks bypassing the specific geographical and cultural realities of India’s diverse labour market. The cost of living in a metropolitan area differs vastly from that in a tribal region. A centralised Floor Wage invariably relies on a national average, which, in a country of such extreme inequality, is a meaningless statistic and may not reflect local realities.Furthermore, this move effectively decouples the “Floor Wage” from the judicial concept of a “Living Wage” as defined by the Supreme Court in the Raptakos Brett judgment, which included provisions for education, health, and old age. The Floor Wage is likely to be a “distress wage”, calculated on the absolute minimum required for subsistence, rather than the holistic needs of a household.Bureaucracy as a bufferFinally, the rule establishes a process of consultation with the Central Advisory Board and State Governments (Rule 11(2) and 11(3)). While this adheres to procedural norms, historical precedence suggests that such consultations can delay implementation.The Board is often composed of technocrats and industry representatives who view wages primarily as a cost of production. The consultation process can serve as a buffer, allowing the government to deflect demands for immediate hikes by citing pending deliberations.In other words, it could risk becoming a mechanism to diffuse political pressure through procedural delay.ConclusionRule 11 provides a predictable, low-cost national wage structure. However, by fixing a floor wage that risks being minimal, and allowing for a five-year freeze in revision, the State constructs a framework where the price of labour may fail to keep pace with the cost of living. It suggests a policy shift where the preservation of industrial “competitiveness” takes precedence over the protection of real wages.