Industrialists unhappy over heavy increase in minimum wage in Sindh

Published June 16, 2021
Korangi Association of Trade and Industry (KATI) president Saleem uz Zaman termed the Sindh government decision “the last nail in the coffin of the already struggling industrial sector”. — AFP/File
Korangi Association of Trade and Industry (KATI) president Saleem uz Zaman termed the Sindh government decision “the last nail in the coffin of the already struggling industrial sector”. — AFP/File

KARACHI: Sindh government’s proposal to enhance the minimum monthly wage of a worker to Rs25,000 from Rs17,000 has irked Karachi-based industrialists, who fear that either they would have to close down their business in the city or move their units to Punjab, where the proposed minimum wage is Rs20,000.

Commenting on the proposal, they said that industrialists were not taken on board by the government before making such a decision. Punjab government has proposed Rs20,000 as the minimum monthly wage of a worker whereas Khyber Pakhtunkhwa and Balochistan, who are yet to announce their budgets, are unlikely to go for such a big hike.

Chairman of the Businessmen Group and the Council of All Pakistan Textile Association (CAPTA) Zubair Motiwala argued that when the tariff/rates of petrol, diesel, gas and electricity in the entire country were same, then what was the justification of fixing the minimum wage higher in Sindh than in other provinces.

He pointed out that major export-oriented textile units had 5,000-13,000 employees and one could easily understand how deeply the heavy increase of Rs8,000 in every worker’s wage would impact companies’ financial health.

“How would exporters in Karachi compete with Bangladesh, India and other regional countries because of the huge disparity in wages between Sindh and other provinces?” he asked, fearing that industries would have to move to Punjab and some other province under such a situation.

According to him, wages in Bangladesh are 20-25 per cent lesser than in Pakistan.

The Sindh government should find new avenues to provide relief to workers instead of taking such a “harsh” decision which would only harm local production and exports, he said.

Korangi Association of Trade and Industry (KATI) president Saleem uz Zaman termed the Sindh government decision “the last nail in the coffin of the already struggling industrial sector” and said that the proposed hike in the minimum wage was absolutely unacceptable.

He said that an industry with 1,000 employees would have to afford an extra Rs8 million under the head of salaries as announced by the provincial government.

Korangi with 4,500 units has over 1.5 million workers who are employed under permanent, contractual or daily wage categories.

The Sindh government has tried to gain political mileage as compared to other provinces but this would prove disastrous to the Karachi-based industries. “The minimum wage should be uniform all over the country,” he said, adding that the issue of minimum wage fixed by the provincial government would first go to the Minimum Wage Board, which also has representation of the private sector, for further deliberation before implementation.

SITE Association of Trade and Industry president Abdul Hadi said all town associations would discuss the minimum wage issue with the leadership of the Karachi Chamber of Commerce and Industry (KCCI) tomorrow to jointly decide a future course of action.

He said the Sindh government announced the decision without seeking any input from the stakeholders and without taking the issue to the Minimum Wage Board.

“Without taking ups and downs of ongoing businesses into account, the whopping increase in the minimum wage is not possible,” Hadi said, adding that the SITE area is the hub of 4,000 units where over 500,000 people are employed in different categories.

North Karachi Association of Trade and Industry (NKATI) president Faisal Moiz Khan said that many industrialists might have agreed to the minimum wage of Rs 20,000 from Rs 17,000 keeping in view the post-Covid situation in the country but Rs25,000 proposed by the Sindh government seemed to be a political gimmick to appease its voters. “I condemn the move of the Sindh government which is not at a par with other provinces,” he said, adding that North Karachi with 2,500-3,000 units had over 200,000 employees.

Industries, especially exporters, who are already struggling under high utility costs compared to other countries, would find it hard to survive in a stiff market both domestically and globally, according to him.

Executive director of the Pakistan Institute of Labour Education and Research (Piler) Karamat Ali said the decision to raise minimum wage to Rs25,000 should have come from the Minimum Wage Board after a consensus among employers, employees and the government instead of announcement on the floor of the provincial assembly.

“Increases in the minimum wage has been going for the last few years but no authority checks its effective implementation,” he said and claimed that “80pc of workers are still deprived of the enhanced minimum wage”.

He was of the view that the minimum wage should be fixed at Rs35,000 depending on workers’ family members and rising cost of living. “Due to low income, many people compromise on the cost of living.”

Published in Dawn, June 16th, 2021

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