35
THE recent IMF agreement on a bailout package has sent the rupee spiralling down to the bottom of the abyss. With petroleum prices hitting a new high and the proposed increase in utility prices, the working class will be dealt a severe blow.
Out of the 65 million-strong labour force, the 38 per cent engaged in the agriculture sector already suffer due to income fluctuation. A large number of them have mortgaged their labour for years in advance and are living in conditions commonly described as being similar to slavery. The recent price hike would push them deeper into debt bondage, as they would require more money in advance to meet food, medical and other necessities.
Approximately 72pc of the remaining non-agriculture labour force is employed in the informal sector, which by definition means they have no rights or secure employment and wages. Only 28pc of workers categorised as formal labour, employed in major industries and commercial establishments, have, to some extent, secure jobs and regular wages. They may somehow survive the unprecedented inflation.
While the price of everything goes up, it is important for safeguards to be established for workers. One way to do this is to ensure that every working person in Pakistan receives a minimum income for survival and financial stability. Unfortunately, no government has ever given serious consideration to this important right. In Pakistan, the only mechanism is the fixing of minimum wages, which are revised annually at the announcement of the federal and provincial budgets. A cursory analysis shows that the exercise does not follow any law or prescribed economic model. It is decided on a rather non-serious and arbitrary basis, based on the whims of those in power.
The minimum wage is decided on an arbitrary basis.
Take the example of Sindh and Punjab. They host about 80pc of the country’s total labour force, and have minimum wage laws. The law provides for the establishment of the Minimum Wages Board for fixing wages. Through an October 2018 notification, the Sindh Labour Department fixed the minimum wage for unskilled workers at Rs16, 200 per month, or Rs625 per day. Punjab recently fixed it at Rs16,500 per month, or Rs635 per day. Could any government official or member of the so-called minimum wage boards prepare the budget of an average Pakistani family size of 6.5 members within Rs16, 500?
Adding insult to injury is the non-implementation of this meagre wage. The official Labour Force Survey for 2017-18 indicates that at least a quarter of eligible workers do not receive the minimum wage. This is quite understandable as the implementation mechanism is almost nonexistent.
The Sindh Minimum Wages Act 2015 is a progressive law as it requires the employer to pay wages through bank accounts for evidence of payment. However, the Sindh government has failed to put in place any mechanism to implement this law.
The Sindh Minimum Wages Board has only 14 members of staff against the sanctioned strength of 32. And for the past 12 years, the board has been without a permanent chairperson. Another 10 positions for wage inspectors have been vacant since 2007. Labour inspectors for factories and shops (which are also responsible for the implementation of the minimum wage) are few in numbers, short in capacity, and very much infected by corruption and inefficiency.
In such a scenario, leaving the marginalised masses at the mercy of this faulty system of fixing wages without scientifically calculating the cost of basic needs is an injustice to the workers.
What is needed is fresh thinking. One way to do this is to consider a system where the government ensures that every working citizen receives a minimum income against the eight-hour working day. This could be done through reforms and the overhauling and capacity building of the minimum wage boards operating under the provincial labour departments. This should also include a scientific model that puts together a basket of basic needs such as food, health, clothing, housing and education to calculate the minimum wage. This must be followed by a strong implementation mechanism to ensure that workers are actually paid the official minimum wage that has been notified by the government.
Additionally, the government may support those who are not officially eligible for minimum wage through various social security schemes and improving the quality of the existing education and health facilities. Schemes such as BISP and Ehsaas may be aligned in a way so as to ensure that every working person receives a minimum income as a right to survive high inflation. If the PTI government has any feeling for the common people, this issue needs urgent action. The government will only survive when people have incomes on which they can survive.
The writer works at Piler.
Published in Dawn, May 28th, 2019
