KARACHI: Trade unionists, beware! A new kind of collective bargaining agent (CBA) is in town to replace you. As implausible as it may sound, it’s the CEO you’ve been haggling with for decades.
The minimum wage is a thing of the past, says the new CBA. A full-time job is supposed to lift one out of poverty, not keep them there indefinitely. The latest catchword in the corporate world is fair living wage (FLW), an arbitrary-sounding figure of Rs51,500 a month (for 2022), which is about twice the minimum wage notified by some provincial governments.
In 2020, Unilever Pakistan Ltd made a pledge, without external prodding, that each worker employed directly or otherwise must earn an FLW by 2030. The company is 60pc FLW compliant today.
“We’ll be 100pc FLW compliant in the next 18 months,” said Unilever Pakistan CEO Amir Paracha at a recent roundtable conference held at the multinational’s offices.
By the looks of it, the FLW movement is gaining traction in Pakistan. Big companies that’ve signed up for the cause include the likes of Bank Alfalah, Jazz, the Bank of Punjab, Careem and Foodpanda. Smaller companies, including start-ups, have also joined the roster.
What’s an FLW? It’s a rupee value — calculated by an international body — that socially responsible companies believe every full-time worker deserves to receive as a monthly salary.
“We must share prosperity if the country is to grow,” said Mr Paracha who’s been goading his fellow CEOs into adopting the FLW as a salary benchmark for many years now. “No one can survive at a salary of Rs25,000 a month,” he said.
Mr Paracha’s public advocacy for this cause has earned him the ire of many in the business circles. People have called him “showy” for his pro-worker views, according to one participant of the roundtable.
Lowbrow business owners who dominate the politics of business chambers in the city have privately called Mr Paracha a publicity-seeking, renegade CEO who has defected to the woke and is now being spendthrift with the shareholders’ money.
The issue is so contentious that one group of employers headed by a prominent business leader even went to court against the last increase of a few thousand rupees in the government-notified minimum wage — a move that “surprised” Mr Paracha.
Raising wages isn’t an act of charity, he said. It makes a “compelling commercial case” to pay workers an amount that’s enough to sustain a dignified standard of living. He brought down the attrition rate in the sales staff of Unilever Pakistan from 40pc to 4pc many years ago simply by doubling their salaries in one go, he said.
Jazz CEO Aamir Ibrahim concurred. “You can’t fly on half an engine,” he said while referring to the underpaid staff that stays with the company but doesn’t perform well for being demotivated.
Speaking on the occasion, a representative of Abhi — a startup that lets employees of its corporate clients access their earned wages before the first day of next month — said workers are under intense financial pressure because of record-high inflation.
Citing the example of a large textile mill in Karachi, he said more than half of its workforce consisting of thousands of employees routinely draws wages in advance to make ends meet. Some of them access their next salaries as many as 20 times in a single month, he said.
One participant asked Mr Paracha and the coalition of “conscientious employers” to come up with a shared symbol to be affixed on the products made by FLW-paying companies. Given a choice, most conscientious consumers will prefer doing business with FLW-paying companies, he said.
Another participant belonging to a media group suggested that FLW-paying companies should also use their marketing and advertising budgets to support newspapers and channels that pay fair wages to their workers.
Published in Dawn, May 5th, 2023