Ridhingra,
I think many of us have experienced that we are labelled over-qualified for certain jobs at times and we feel little odd.
Perhaps the person was in need of job and so he had to hide his certifications and degree to seek job.
However, now he cannot claim this. As suggested by Nashbramhall, he may lose his job because he concealed the information.
The company can take a call on if or not to continue the services. But surely he cannot claim on the company that since he's a graduate he ought to be paid out more....
If you see certain places, they need uneducated skilled/un-skilled labors....
Like Mumbai Dabbawallas - they will not hire graduates even if you're in throat deep debt...
Lijjat papad - the trust hires uneducated women who are skilled in making pickles and papad...
Now if I go to them and seek employment by hiding the fact that I am graduate, I may get a job that gives me a basic pay.
But tomorrow I can't go and tell them, I am graduate and go pay me as per industrial standard...
The organization makes it clear on the part if or not they need graduates.... The company has it's own budget, if we can't afford, we should not accept, but we can't demand...
I would love to share a personal example from family....
My father is a medical doctor... While he was very young and just graduated as a Dr., my grandfather expired. He thought of taking up a job so that he can have a stable income. He ran from pillar to post and got no job.
One place when he went for interview, the uncle looked at his certificates, asked the peon to get a tea for him, and over the tea the interviewer advised my dad to stop looking for job because - he was over qualified for the job and no employer would really like a Dr. doing such petty jobs....
Hope this helps you in taking better decision....
Humbly tell the person you can't afford a hike. more so the job is meant for uneducated / unskilled people... And put forth your point in an humble yet strong way....