80% workers denied minimum wage

Pakistanis are facing dire living conditions due to the country’s failure to enforce minimum wage laws and a historic rise in inflation. According to the Pakistan Institute of Labour Education and Research (PILER), an estimated 80% of unskilled workers are not receiving the minimum wage of Rs25,000 per month, which was awarded ten months ago. Furthermore, a recent World Bank report found that 83% of households in Pakistan are not receiving the minimum $2 a day needed to sustain basic needs.

Speaking to The Express Tribune, PILER Executive Director Karamat Ali says that 80% of unskilled workers are not receiving the minimum wage, and that historical high inflation has exacerbated people’s suffering. In March, inflation reached 35.4%, significantly impacting purchasing power.

While the Punjab government recently announced an increase in minimum wage to Rs32,000 a month, Ali says that there is no mechanism in place to ensure implementation of the government order or to check which industrial and commercial houses are paying their employees what. He projected that each worker should be given a minimum of Rs50,000 a month to afford essential things and services such as food, drinking water, education, and healthcare services.

Citing a World Bank (WB) report, Ali states that 83% of households in Pakistan are not receiving the minimum $2 a day.

The WB report is 18-months-old and since then, inflation has almost doubled while the rupee has lost over half of its value against the US dollar.

“Putting the WB report in the context, one can imagine how badly the people’s purchasing power has gotten impacted in the wake of six-decade high inflation and massive rupee devaluation,” said the PILER executive director.

Successive governments have come and gone, yet taken no action on the World Bank report has been taken to date. Trade unions have also failed to act upon the report, as workers are practically denied getting organised under the banner of trade unions. Many workers are unable to take legal action because their contracts are not renewed once they expire, and they lack proof of employment.

“Who so ever raises a voice is rendered jobless with no proof of employment,” he said.

According to another study conducted a year ago, the minimum wage should have been Rs47,500 a month when the government announced Rs25,000 a month for the current fiscal year 2023.

Ali argues that the government should run a campaign to educate workers and support them in receiving minimum wages, similar to the campaign that the UK ran in the 1990s. The UK extensively advertised in the media for six months to educate workers on the minimum wage and what employees should do if they are denied mandatory pay.

Ali says that economic slowdown has spiked unemployment in Pakistan, with reports suggesting that five million people have lost their jobs in the ongoing economic crisis. The situation in rural areas is also poor, where women work in fields from dawn to dusk and fail to earn a minimum of $2 a day, the thin line that divides people over the poverty line and below the poverty line.

The rising rate of unemployment and denial of basic rights is causing people to become violent, and evidence can be seen in the rise of street crime and theft. Ali warns that the rate of lawlessness could increase due to poor living conditions, and the government and other stakeholders should take the situation seriously before it’s too late.

Employment is a national issue, despite it becoming a provincial subject after the 18th amendment in 2010. Ali demanded that the authorities concerned form a council to properly work out the minimum wage and build an index that updates the wages by taking into account prevailing inflation rates. The body should also be responsible for implementing minimum wage rules nationwide and have a mechanism in place to double-check.

The lack of minimum wages in Pakistan has led to poor living conditions for the majority of workers. The government and other stakeholders should take measures to ensure that workers are paid the minimum wage, which is essential for living a decent life. The rising unemployment rate and denial of basic rights are causing people to become violent, and the government should take the situation seriously before it’s too late. Ali’s call for a council to properly work out minimum wages and build an index that updates the wages according to inflation rates is essential in ensuring that workers are paid fair wages.

Published in The Express Tribune, April 22^nd, 2023.

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