The Sindh Minimum Wages Board has proposed a 20 percent increase in the minimum wage. At a board meeting that presided over the minimum wage segment, the participants made the decision to increase the minimum wage, keeping in view the the struggles of the country’s cash-strapped economy.
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The participants considered numerous economic struggles currently on the rise in Pakistan. Their discussion revolved around aspects such as high inflation rate, price-hike in basic commodities, rise in pay of government employees in the budget for 2020-2021, and the capacity of employers to pay wages.
After detailed deliberations, the board unanimously approved recommendation of 20% increase in the minimum wage of all categories of workers in respect of 42 industries
Meanwhile, the Employers’ Federation of Pakistan (EFP) President, Ismail Suttar, on Monday rejected the “arbitrary and unwarranted notification” proposed by the Sindh government. He argued,
During the current difficult times arising from the pandemic, retaining existing workers has been an arduous task and such notifications can rightly be termed anti-industry
Suttar argued that the increase in minimum wage would further aggravate the ongoing unemployment wave, since most employers would react by reducing their numbers due to rising wage bills. He pointed out that the moment salaries are increased, employers would be forced to enhance wage bills and salaries of employees who’re paid substantially more than the minimum wage. He added,
This will obviously add to the burden on employers and hike the cost of doing business substantially
Meanwhile, prominent economists and labor leaders have provided a much different viewpoint on the matter. Despite the 20% increase in wages, economist Muzammil Aslam commented that employers would retain their workforce instead of firing them. He said,
Compliance with minimum wage is next to none in the country. More than 80% of the workers are paid less than the minimum wage and there is no one to take notice of the situation
Aslam suggested that people who worked as employees in shops, servants in houses and bus conductors, deserved increments, despite employers paying them below the minimum level. He added that the employers, most of them non-filers, paid such workers liquid cash, deeming the government unable to catch them.
Pakistan Institute of Labor Education and Research (PILER) Executive Director Karamat Ali was disconcerted over opposition towards the new minimum wage proposal. He argued,
People are so short-sighted in our industry that they are opposing such a meagre increase
He also said,
When salaries rise, labor productivity soars, which subsequently boosts the output of every industry
Karamat Ali argued the minimum wage should be at least Rs. 35,000, considering an average worker’s expenses. He lamented that over 72% of the country’s population was malnourished due to shrinking real income. “If one takes a look at the increasing house rents and utility bills, this minimum wage is insufficient for just these expenses”, he said.
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The purpose of streamlining minimum wages is to protect workers against unduly low pay. Every Pakistani deserves sustainable wages to survive in these trying times.
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