LAHORE: Minimum wage has emerged as a major issue in Bangladesh, which until recently held the dubious distinction of being the lowest-paying garment exporter among major textile-producing nations. With the continuous decline of its minimum wage in dollar terms, Pakistan has now taken over that position.
The minimum wage issue in Bangladesh has taken an ugly turn, leading to riots and the unfortunate loss of life among protesting workers. In response to growing pressure, the Bangladesh government increased the minimum wage from a stagnant $85 per month since 2018 to $112 per month (Tk12500). However, this increment has failed to satisfy the demands of the workers, who are calling for a minimum wage of Tk2500 or $220 per month. The International Labor Organization, the United States government, and EU countries have echoed the workers' demands, urging the Bangladeshi government to implement a living wage for its garment workers.
In 2018, Pakistan's minimum wage stood above $120, but despite a few increases in rupee terms, it has now declined to $110, making it the lowest among textile-exporting countries. Even this meager wage is only accessible to around 20 percent of the country's workforce.
Providing workers with a minimum living wage is widely recognized as essential for several reasons, extending beyond mere economic considerations. A minimum living wage ensures that workers can afford the basic necessities of life, such as food, shelter, clothing, and healthcare.
It reflects a commitment to providing employees with a standard of living that allows for dignity and well-being. Low wages contribute to income inequality, a growing problem in Pakistan. Implementing a minimum living wage helps bridge the wealth gap and ensures that the benefits of economic growth are shared more equitably among the workforce.
Workers who receive a fair wage are generally more motivated, satisfied, and productive. Adequate compensation can lead to higher levels of employee engagement and commitment to their work.
When workers earn a living wage, they are less likely to live in poverty or rely on social assistance programs. This can lead to a reduction in the overall burden on social services and government assistance programs.
Financial stress due to low wages can negatively impact physical and mental health. Adequate compensation can contribute to improved overall well-being, reducing stress-related health issues and associated healthcare costs.
When workers earn more, they have greater purchasing power. This can lead to increased consumer spending, which, in turn, stimulates economic growth and supports businesses. If wages remain low for extended periods, several negative consequences may arise, as is evident from Pakistan's example.
Prolonged low wages have contributed to persistent poverty, leading to social issues such as homelessness, crime, and inadequate education, especially in low-income communities.
Workers facing extended periods of low wages may become discontented and may engage in protests, strikes, or other forms of labor unrest. Fortunately, Pakistan has thus far been spared from such measures.
Low wages have led to higher turnover rates as employees seek better-paying opportunities elsewhere. This has resulted in a loss of skilled and experienced workers, impacting the overall quality and productivity of the workforce.
Low wages have hindered upward economic mobility, making it difficult for individuals and families to improve their financial situation over time. This has triggered a cycle of poverty that is challenging to break.
Pakistani entrepreneurs must not take the patience of their workers for granted and should provide them with a fair living wage without adhering to the government's inadequate fixed minimum wage. There are successful business enterprises in Pakistan that take proper care of their workers and thrive even in economic downturns.