New Wage Hike a Mere Palliative, Say Labour Advocates

KARACHI, May 5, 2010 (IPS) - Imran Ali, 23, has no reason to complain. His monthly take home pay of 8,600 Pakistan rupees (about 102 U.S. dollars) as a government employee allows him to augment his family’s meagre income.

His father – a public transport coach earning between 400 and 500 rupees (about 4 to 6 dollars) a day – can hardly support a family of seven.

"We eat enough and all my siblings are studying," said Ali, who goes to school in the evening to finish his college education.

Many of Ali’s neigbours are not as fortunate, though, earning only 4,500 to 6,000 rupees (53 to 71 dollars) a month.

About 38 percent of Pakistan’s estimated population of 170 million lives below the poverty line. Their situation is made worse by the skyrocketing food prices, the worst-ever energy crisis to hit the South Asian country in years, and a rising unemployment, experts say.

Worse off are the unemployed, numbering four million, according to the Pakistan Institute of Labour Education and Research (PILER), which promotes workers’ rights.

When Prime Minister Yusuf Raza Gilani’s announced a thousand-rupee increase in the minimum wages on May Day – or the International Workers’ Day – the reactions were mixed. To many a monthly take of 7,000 rupees (around 83 dollars yes) – assuming it is even implemented – will hardly make a dent in the poverty rate.

"The (wage) increase is good but it’s a pittance," said a skeptical 60-year old Farid Awan, general secretary of the All Pakistan Trade Union Federation (APTUF). "If implemented, it will fail to bring some succor to the poor."

"The increase does not correspond with the price hike of the last two years," said Farooq Tariq, spokesperson of the left-wing Labour Party of Pakistan.

"In October 2008, food price inflation was over 30 percent," said Karachi- based economist Dr Asad Sayeed. "Now it is 15 to 17 percent," still significant by any average wage earner’s standards.

It (minimum wage hike) is "better than nothing," said Kaiser Bengali, a senior economist and currently advisor to the chief minister of Sindh province, where this capital is located. But while "wage increase has its short-term benefits, long-term requirements should not be forgotten," he added.

Based on the Pakistan Household Economic Survey conducted last month by the Free and Fair Election Network (FAFEN), a non-profit organisation, a household of six spends an average of 8,583 rupees a month – or about quarter more than the new and yet-to-be-enforced government-imposed minimum wage.

Approximately 3,926 rupees go to nine basic commodities, including flour, rice, sugar, vegetable ghee, onions, potatoes, milk, tea and kerosene, said FAFEN.

A government official, requesting anonymity, said "the basis for calculating the minimum wage" should be looked into while voicing skepticism over the promised minimum wage hike, which he described as "one more empty promise."

But while a mandated minimum wage may stave off some of the adverse impacts of the economic crunch still hounding Pakistan, it puts a lot of burden on factory owners like Salim Tabani.

"Instead of finding solutions to lowering the prices of consumer items and controlling public expenses, the government is putting the burden on us," said Tabani, whose garments factory employs more then 600 workers, half of them earn a monthly minimum wage of 6,000 rupees (71 dollars).

Not one of his workers gets less than that, including the contractual ones, he stressed. He added that he has little choice but to increase the wages. Soon he will have to start paying his minimum wage workers 7,000 rupees.

But Tabani may be one of a few employers who follow the mandatory minimum wage increases.

Zulfikar Shah, PILER’s spokesperson, said many laborers are still getting the old minimum wage of 4,500 rupees (53 dollars) two years after government had raised it to 6,000 rupees (71 dollars).

Over 70 percent of the industrial units in the Punjab province do not even pay the required minimum wage, said the Labour Party’s Tariq, citing a 2009 survey conducted by the Trade Unions Action Committee for Minimum Wages, which was formed in 2008 by several trade unions across Pakistan. "It varied from 4,000 to 5,000 rupees at best," said Tariq, referring to the standard minimum wages being paid to workers. "And where, 6,000 rupees was paid, the working hours were increased from eight to 12 hours in many cases."

Awan is disgruntled with the government’s new labour policy announced on May 1 – the sixth in six decades. "Each policy reads the same, with changes in comma here and a full stop there," he said.

Based on Prime Minister Gilani’s policy pronouncement last week, all contract employees in government are assured of regularisation. In addition, he said, workers would be able to access free health services, and their children would be provided technical education.

The policy, however, excludes the 8.52 million people working in the informal sector. Of these, 70 percent are women, according to the 2009 Pakistan Economic Survey.

"The wage increase means nothing to home-based workers, because they are not considered labour and do not get minimum wage," said Asma Ravji of Sungi, a non-governmental organisation in Islamabad, which advocates equal rights for home-based workers.

Unlike Ali, they have every reason to complain.