Government must ensure implementation of minimum wage

LAHORE: Minimum wage is a farce for 80 percent of the workers in Pakistan as even the documented enterprises openly violate the law and pay their workers less than the minimum wage.

We know that minimum wage is denied to domestic servants, workers employed by shopkeepers, and even those that operate a chain of stores. The industries too do not enrol all employees on their pay roll to avoid giving minimum wage. This can be judged by the total number of workers registered with social security departments of all the four provinces. The number does not exceed two million, while there are officially over 60 million active workers in the country of which 94 percent or 56 million are employed.

Those workers that are registered with social security organisations definitely get the minimum wage.  What about the rest? A glaring example in this regard came two years back when over 100 workers died due to collapse of a garment factory in state of art Sundar Industrial Estate. The few survivors told media that they were paid Rs8,000 per month; Rs4,000 less than the minimum wage fixed at that time.

We never heard of any action taken against the labour inspector responsible for the enrolment of workers with the social security department. We can very well judge the state of affairs in rest of the country, when such omissions can occur in the prime industrial estate of Punjab.

Most of the vocal and strong labour unions are in public sector enterprises where this law is fully implemented. These include PIA, Railways, Pakistan Steel Mills and Wapda (Power distribution companies). All these entities are posting huge loses but the minimum wage and regular increments are given. The other compliant enterprises are the big corporate sector and multinational companies. The textile sector claims that it is totally documented and employs 3.5 million workers. Why are those workers not registered with social security? The state and the businesses are not serious in ensuring a minimum wage for the workers.

Basically there are three types of wages that are given to the workers. The first and most desirable is the living wage. The wage is fixed at a level that ensures fulfilment of minimum human needs that include access to basic essential foods, shelter, clothing, healthcare, and old age security. The businesses however go for what they call fair wage that is always lower than the living wage. Fair wage takes into account efficiency of the worker from the employer’s prospective. Minimum wage is even lower than the fair wage and under law it is mandatory for any employer to give minimum wage to the workers. It may look inhuman but it is a reality that both businessmen and the policy makers agree that it would be ridiculous to mandate a living wage for the worker.

Pakistan is still a poor country and its economy is unable to absorb over two million workers that join the labour force every year. There are numerous jobs where labour has no bargaining power to demand a wage that is sufficient for survival. When employers get away by giving low payments to the labourer, it results in huge social costs, including poverty, ill health, malnutrition, and endemic debt. The poor are then forced to give their children and women folk as bonded labour. If mandatory fair wage is strictly implemented, these practices would stop as no businessmen would employ low-productive and unskilled child or women.

Few economists and most businessmen oppose mandatory minimum wage as it is not seriously implemented; and those complying with the law feel at a disadvantage against a majority who do not comply. However, the thrust should be on strict implementation of the minimum wage law.

Another reason put forward is that the market and not the government should determine prices so as to preserve efficiency and competitiveness. However, the exporting industries that comply with their foreign directives on minimum wage and additional facilities for workers are doing better than those who exploit their workers.

This government assumed power with the promise that minimum wage of the worker would be fixed at Rs15,000 per month by the end of its tenure. It is officially on track on that promise, but on a practical level, it is paying only lip service on implementation.