Minimum wage increase

The Punjab government’s decision to raise the minimum wage from Rs25,000 to Rs32,000 for unskilled workers is a step in the right direction towards addressing income inequality and improving the living standards of the labour class. But will it be enough for poor families being pounded by waves of uncertainty and deteriorating economic conditions?

With inflation surging to a record-breaking 46.65% and prices of essential commodities sky-rocketing during Ramazan, a mere Rs7,000 increase will hardly provide the relief needed to improve the precarious conditions of millions that have fallen below the poverty line. Moreover, lack of implementation of labour laws is a significant challenge that must be addressed. This neglect by the government means that workers do not have sufficient protection. Many of them including private security guards and construction workers are still paid grossly below the minimum wage, leaving workers vulnerable to exploitation by their employers, many of whom do not comply with labour laws. It must also be realised that Pakistan’s labour market is largely informal, which means that many workers such as house maids and child helpers are not registered with the government and do not receive any legal protection or benefits. This makes it challenging to regulate the labour industry and enforce laws effectively. Absence of monitoring mechanisms to ensure compliance with labour laws is another contributing factor. In addition, it is equally essential to consider the impact of the minimum wage increase on small businesses that may struggle to absorb the increased labour costs.

The government must provide support and incentives to help businesses adjust to the new minimum wage requirements and take concrete steps to enforce labour laws. Moreover, dealing with the informal sector remains and mammoth task requiring out of the box thinking. But the root cause of labour exploitation lies in an unequal and corrupt system that needs revamping.

Published in The Express Tribune, April 4^th, 2023.

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