FORCED by a precarious external finance situation, the current government’s development focus has shifted wholesale from employment generation towards considerations of macroeconomic stabilisation. This is unfortunate because dignified and safe employment should be a pressing concern for every government, given patterns of migration and economic growth.
In terms of migration, the stagnation of the rural economy, fragmentation of land holdings, and increased proliferation of landlessness and agricultural wage labour (now estimated to be almost 50 per cent of the rural working population), Pakistan’s cities will continue to receive an influx of workers looking for better opportunities. Much of this will be transient, with people floating in and out of urban areas contingent on the type of work they’re able to obtain with a relatively limited skillset.
In terms of economic growth, a large portion of economic activity (nearly 30 per cent of total GDP) is taking place in construction and distributive services like retail and wholesale trade, transportation, storage, and communication. These are the sub-sectors where temporary or permanent migrants from rural areas are likely to find employment.
These two aspects collectively — who is looking for jobs and where are they able to find them — make focus on the quality of employment extremely important. And this is exactly why persisting informality in these sectors becomes a pressing concern. As things stand, 73pc of all labour in urban areas, approximately 11.4 million individuals, are associated with informal work, with the highest proportion (almost 50pc of all informal labour) being in distributive services like retail-wholesale trade and transport and storage.
As things stand, 73pc of all labour in urban areas, approximately 11.4m individuals, are associated with informal work.
Between 2014 and 2015, I spent some time studying labour regulation and business practices in a large retail-wholesale marketplace in the city of Lahore. One of the ideas behind the study was to find how structural economic and social transformations, such as informality, were playing themselves out in lived reality, and what it entailed for broader questions of inequality and development.
It goes without saying that the findings from that research were not particularly encouraging; and there is little reason to believe that things would’ve changed in the intervening five years.
At the outset, wage rates in these sectors remain extremely low. Shop/market workers in the urban economy (which includes the labour found in retail-wholesale bazaars) reported an average income of $1.5 to $4 a day, depending on their skillset. This is barely enough to meet their subsistence requirements, especially for migrants who have to pay considerable amounts (sometimes upwards of 30pc of their income) for rent. In many settings, there is also an informal consensus within business owners to fix maximum monthly wage-rate for unskilled labour at rates often as low as Rs7000. During 2014-15, while I was carrying out my research, this amount was Rs2000 below the minimum wage for unskilled labour in civil trades as determined by the provincial government’s schedule of wage rates.
Compounding low wages further is the issue of working conditions. Working hours in settings like a marketplace are quite long, and often spill well over 12 hours each day. Shop employees, for example, start their day on average two hours before the marketplace usually opens for business and are required to stay back till it closed for the day and their employers deem they have no other work for them.
The exploitation of workers in the informal economy also manifests itself in more dangerous forms. During my fieldwork, I found that because many employees worked long hours in warehouse work, and that too with little training or safety precautions, the risk of physical injury was considerable. Several of my respondents reported of repeated back and knee injuries, for which they had received little medical attention. As there were no formally guaranteed sick days or medical benefits, these workers faced the added pressure of recovering quickly under threat of losing their employment. One respondent mentioned that most employers start deducting wages if their workers took unannounced days off, regardless of how valid or pressing the reason might be.
Government statistics regarding health and safety confirm the risks posed by particular types of work in these sub-sectors of the economy. In 2015, 17pc of all declared occupational injuries in urban areas were borne by service and sales workers. This is the second highest proportion from any one type of occupational group, after craft and related trade workers, and was even higher than the number reported by workers in the manufacturing sector.
The refusal to pay a reasonable wage or provide safe working conditions to employees is definitely not unique to the marketplace that I was looking at; it appears to be a pervasive feature of workplaces that are absorbing rural migrants across the city. Interviews with contractors, small factory owners, and traders based in other locations revealed that associational agreements to fix wage rates below the official figure were a commonplace phenomenon.
Such exploitation is made possible by a host of legal and bureaucratic lacunae surrounding employment in small enterprises. In theory, labour in a large marketplace, for example, is regulated under the obscure Shops and Establishment Ordinance 1969, which lays out provisions concerning working hours, payment of wages, and remedies in case of employment disputes. However, there is no effort by the provincial government to implement any part of the legislation. There were no inspectors appointed to monitor the documentation of employees or their working conditions, and no public official designated for the purposes of resolving wage and benefit disputes.
If there’s one thing these vignettes tell us it is that comfortable white-collar employment found in plate glass buildings is not going to be the norm for the vast majority of urban migrants in this country. Instead, the norm will likely be underpaid work that is exploitative and physically dangerous. And this is precisely why economic and developmental discourse needs to shift considerably to gain cognisance of these issues.
The writer teaches politics and sociology at Lums.
Published in Dawn, December 30th, 2019