Tuesday November 28, 2023

Minimum wages set in stone as bureaucracy seeks a big sweetener

February 22, 2020

LAHORE: Bureaucrats are moving heaven and earth to convince the rulers it is possible for them to continue with their current salaries and they are reported demanding a 120 percent pay raise. However, the question is: will the minimum wage also increase accordingly?

The government fixes minimum salary based on the assumption that it would be enough for earners’ families to sail through the entire month. This though has never been possible for the minimum wage-earners families.

The cost system in Pakistan is based on the minimum salary and any increase announced by the government is resented by the businesses as they complain that it further increases the cost of doing business that is already very high in Pakistan.

But then the cost of living in the country is also much higher than the minimum wage fixed by the state. The impact of corruption, graft, and bureaucratic red tape in any business in the country is very high.

If the corrupt practices are routed out every manufacturer or service provider will be in a position to increase the minimum wage by over Rs5,000 in one go. It is the bureaucracy that prepares the summary for increasing the minimum wage every year. Keeping in view the weak finances of businesses in the country it usually recommends Rs1,000 as a monthly increase in the minimum wage every year.

The salaries of all government employees from grade 1 to 22 are much higher than the minimum wage fixed by the state. In fact the take-home amount of grade 20-22 employees is 10 to 20 times higher than minimum wage workers get in this country. Even then they have been pleading with the government to more than double their salaries.

The amount that higher government cadre earns is enough for a family of 6 to live comfortably and decently. However, if these bureaucrats are craving for a more luxurious life then even double salary will not be enough. We must also note that bureaucrats are notorious for their corrupt practices. The amount that most of them pilfer through bribes and graft is much higher than the increase that they are demanding in salaries.

If the bureaucracy is persuaded to shun corrupt practices we will find sharp increase in revenues, appreciable reduction in production costs and fair competition in markets. There will be numerous job openings in the industries.

We should find out ways to increase the incomes of lower strata of society as mostly there is one wage earner on which the whole family depends.

Most of these earners do not get even the minimum wage because those that have to ensure compliance are muted through bribes. Nevertheless, even if one gets the minimum wage it is not possible in the given situation to live a modest life. Minimum wage-earners live miserably as their genuine needs are not fulfilled in that income.

They cannot even buy food that provides their family with required minimum nutrition. They remain deprived of all pleasantries of life. They cannot afford to buy toys, fruit, or sweets for their children. Some do not even afford to send their children to schools.

Inflation jumped to 14.6 percent in January 2020, its highest in more than nine years, from 12.6 percent in December 2019, reflecting soaring prices for basic food items after the government failed to maintain an efficient food supply chain.

Headline inflation was 5.6 percent in January 2019 and on sequential basis, increased 2 percent in the last month, taking seven-month inflation to 11.6 percent, while consumer prices rose at their fastest pace since December 2010 when they had clocked in at 15.46 percent.

The CPI (consumer price index) inflation for urban consumers increased 13.4 percent on year-on-year basis in January 2020, as compared to an increase of 12 percent in the previous month and 6.2 percent in January 2019.

Keeping these alarming numbers in view, how is it possible for the daily-wage-earners to survive, given their stagnant or even receding incomes.

It is pertinent to not that most of the minimum wagers do not have access to piped gas and they have to buy expensive fuels like LPG (liquefied petroleum gas), coal or kerosene oil and their bare minimum expenses are almost Rs17,000 while those with piped gas may save up to Rs700 for any other expense like monthly education for one child.