IMTIAZ, 23, a well-groomed graduate tea boy at a local company, felt lucky to land a job in a market where many struggle without regular work for years. His pittance of a pay, he said, did not bother him till he learned about the stark intra-company wage disparity. Now, he privately despises the people he serves.

Is his resentment misplaced? According to Imtiaz, his monthly salary of Rs12,000 is a fraction of what the brigade of senior managers earn in a day. Though he’s been working for the past two years at the same place, technically, Imtiaz is not on the company’s payroll. He was hired by a contactor that services this company.

Does this mean all low-pay employees in the country share Imtiaz’s sentiments? It does not take a sociologist to fathom that besides the economic pressure the low wages entail, the sense of alienation will certainly be higher among workers where the salary-wealth wedge between the top and bottom income group is wider.

It does not take a sociologist to fathom that besides the economic pressure low wages entail, the sense of alienation will certainly be higher among workers where the salary-wealth wedge between the top and bottom income group is wider

The recently launched Commitment to Reducing Inequality (CRI) index ranked Pakistan 137 out of 157 countries assessed. The index is based on the monitoring of three key measures critical to reducing the income-wealth gap: public social spending, progressive taxation and labour rights. Pakistan did not fare well on social spending and workers’ protection but was declared to be ahead of the rest in the region in taxation policy.

The World Bank’s poverty and equity brief dated October 2018 reported an increase in the level of inequality since 2010 despite a steep and persistent decline in poverty — from 36.3 in 2010 to 24.3 in 2015. The Gini coefficient of Pakistan was projected to be 0.31 in the said report where zero represents perfect equality and one represents perfect inequality.

Experts were not impressed by the findings. They pointed out the limitations of the Gini coefficient methodology and the small base of survey being used by agencies projecting inequality in Pakistan. They maintained that data collected in the country was weak and very often the income and wealth of the richest people was under-reported as in other developing countries.

The skewed landholding patterns and deep-rooted culture of nepotism along with the elite power structure combined to enable the richest to multiple their wealth. Experts emphasised the need to break the framework that deprives people of equal economic opportunities. They called on the government to increase social spending to ensure availability of basic social and physical facilities to all citizens irrespective of their societal standing.

To effectively deal with the issue of inequity, experts believed that as a starting point there was a need to radically and rapidly improve data on inequality and closely monitor progress on this key dimension.

Senior officers in the relevant ministries excused themselves from commenting as evidence to endorse or dismiss projections of global agencies, they said, was not available.

Finance Minister Asad Umar, a self proclaimed fan of renowned French economist Thomas Piketty, sounded critical of a profoundly unequal socio-economic structure in Pakistan. When his attention was drawn towards the mechanical approach of bureaucrats who absolved themselves by claiming that the subject is beyond their domain, he mailed the following response:

“The wealth and income of the people should definitely be tracked. As opposed to completely dominant neoliberal economic thought in Pakistani politics and media, inequality matters, not just morally and socially but also economically.”

He hinted that the next economic survey, guided by the new leadership, may cover the subject in some form or shape.

Ehsan Malik, CEO of the Pakistan Business Council, admitted that the issue of economic inequality is not treated as a major concern by corporate circles.

“I don’t think that business executives conceive economic disparity as a part of their immediate agenda though there is greater awareness on the pitfalls of economic exclusion that impacts the size of the market.

“Many companies, however, are attempting to integrate the Sustainable Development Goals (SDGs) in their business strategies.”

He mentioned the efforts of the Centre of Excellence in Responsible Business to sensitise the corporate sector on socially sensitive issues. The overarching target of SDGs is to eradicate poverty and reduce inequality.

Majyd Aziz, President Employers Federation of Pakistan accepted that economic disparity at the two ends of the social scale in Pakistan is increasing despite the growing middle-class. Without stating in so many words, he blamed the government’s mismanagement for the sad situation, absolving employers of any responsibility in this regard.

“The revenue collectors have failed miserably to curb smuggling, under-invoicing and asset mis-declaration that makes the privileged class richer.”

He was also critical of the fiscal policy that served to deepen the problem and regretted the culture of tax evasion in rich Pakistanis.

“The high reliance on indirect taxation (that disproportionally burdens the poor) is back-breaking for the majority,” he said.

He regretted that the Benazir Income Support Programme (BISP) that could have served as an effective social security net for the vulnerable segments is used ‘as a political tool’.

Published in Dawn, The Business and Finance Weekly, November 19th, 2018