Minimum wage matter left ‘untouched’ in budget announcement

Measures included increase in salaries of federal govt employees, but labourers ignored

Salman Siddiqui May 05, 2018

KARACHI: In election year, many expected the government to announce incentives that would appeal to the masses.

However, it completely ignored minimum wage earners that remain the most vulnerable segment of the economy.

The government left the matter untouched in its budget for 2018-19, against its past practice of increasing the minimum wage each year. Last year, it increased the amount by Rs1,000, taking it to a minimum of Rs15,000 per month.

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While the PML-N government announced a 10% increase in salaries of federal government employees, it maintained complete silence over minimum wages, sources familiar with the development confirmed to The Express Tribune.

At the same time, it remained uncertain whether the provincial governments would announce any increase in minimum wages in their respective budgets after some stakeholders urged to let their ‘provincial minimum wage boards’ decide the new amounts instead.

They are tripartite boards comprising employers (40% representation), workers (40%) and government (20%).

The boards, which were constituted in light of the 18th Amendment, should have ‘unanimously’ decided the new minimum wages before the provincial budgets and recommended the same to the chief ministers for their approval and announcements.

However, the boards in some of the provinces have yet to hold their very first meeting in this regard and are unlikely to achieve the given task of deciding a new ‘unanimous’ minimum wage before their provincial budgets.

Simultaneously, there is no clear mention of a timeline.

“In front of ministers and other high officials, I advised Sindh chief minister on May 1, 2018 (Labour Day) that he should not announce the (new) minimum wage in the forthcoming budget scheduled for May 10,” Employers’ Federation of Pakistan President Majyd Aziz said.

“However, the chief minister may still announce an increase in the minimum wage in the budget,” he said.

“Provincial minimum wage boards should be empowered to make a unanimous decision regarding minimum wages,” he said, adding its recommendation may be made part of the next budget to be announced by the new government.

The outgoing Sindh government would announce the budget for the next three months (July-September 2018) only.

The board would recommend different minimum wages for skilled and unskilled workers. As of now, both are supposed to get a minimum of Rs15,000 per month. “This system is injustice to skilled workers,” he said.

“It is not the domain of the federal finance minister to announce any increase in the minimum wages. After the 18th Amendment, it has now become a provincial subject,” he added.

Pakistan Institute of Labour Education & Research (PILER) Executive Director Karamat Ali said an upward revision in minimum wages is the right of every worker.

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“Minimum wage earners must be given an increment in their salaries equivalent to inflation in the country,” he said.

He argued that “the existing minimum wage of Rs15,000 per month is insufficient”. The provincial governments first rationalise the minimum wages in light of International Labour Organisation (ILO) and keep increasing the amount to keep pace with inflation.

Following the Baldia factory fire incident, he said, ILO calculated minimum wages for the lost workers at Rs25,550 per month in September 2012 and recommended to award 75% of the calculated salary as pension. “Keeping in view the then ILO recommendation, the current minimum wage should be somewhere between Rs30,000-31,000 per month,” he recommended.

He urged the government to resume the decades old ‘ration card’ system to support the poor segment of society. Under the system, the government used to offer ration at 20-25% discount. “India has expanded the ration card system and allowed people other than the poor to avail the system as well,” he said.

Published in The Express Tribune, May 5th, 2018.

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