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Minimum wage


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IN announcing an increase in the minimum wage standard, Pakistan’s labour issues have merely been offered a sop by the authorities. Addressing a function held to mark International Labour Day in Islamabad on Tuesday, Prime Minister Yousuf Raza Gilani announced that the minimum wage would henceforth be increased to Rs8,000 per month. Punjab Chief Minister Shahbaz Sharif went a step further to say that the standard in his province has been raised to Rs9,000. While welcome, these moves must be considered token gestures. The increase is meaningless for countless contract, daily-wage and domestic workers, for whom negotiating fair pay is dependent on their employers’ conscience. The state has no means of ensuring that the standard is adhered to in all labour-related spheres, except those directly under the government’s control. Meanwhile, the people to whom minimum wage standards would apply are working in such a disadvantaged position that they have little chance of complaining or ensuring that their rights are upheld.

Interventions such as these have a better chance of working if the steps are taken in consultation with the groups that have a stake in the issue. Instead of making unilateral announcements and imposing a top-down decision, the federal and Punjab governments could have explored the benefits of discussing the matter with representatives of forums such as the Federation of Pakistan Chamber of Commerce and Industry, leaders of industry and labour-rights activists. The process would have been longer and an agreement would have had to be hammered out with consensus, but there would have been more chances of success. As it stands, while the prime minister and the Punjab chief minister have taken their bow for addressing labour concerns, their move is unlikely to substantively improve the lot of the thousands of men and women towards whom the concession is directed.

Comments (3) Closed

BIMAL CHANDRA JHA May 03, 2012 03:19pm
Sir, The minimum wages fixed by the govt. of Pakistan @ Rs.8000/- per month and Rs.9000/- per month by the govt. of Punjab seems to be very attractive if we compare the same wage slab with the prevalent minimum wages fixed by the govt. of India and by some state governments, but the most important thing is the implementation of the minimum wages to the workers. According to some legal pronouncements of the Supreme Court of India "an industry has no right to exist if it fails to implement minimum wages in the industry " though it is true that many Indian industries deliberately violate the law of the land and the govt., the executing authority becomes mute spectator despite the laws empowering the authorities to take punitive action. In some case the govt. itself violates law in respect of implementation of minimum wages. I do not know the exact position in Pakistan, but i my humble submission the minimum wages is the wage which should be implemented compulsorily in all establishments of the respective countries without making any difference between daily wages, piece-rate wages or monthly wages if law is there. Yours faithfully; BIMAL CHANDRA JHA Samanpura Road, Patna, India.
hira habib May 10, 2012 04:42pm
Recently announced minimum wage of Rs 8,000 per month and a step by Punjab to settle minimum wage in the province to Rs 9, 000 could be taken as one element of improvement in working conditions and I would have appreciated if there had been a move from Informal to formal economy so as to cover the already uncovered. Pakistan ahs 73.8% work force in informal sector. Without a tool that could support job creation and demand as well as its recommendations for removing obstacles to skills training, youth employment and labour market transitions having a minimum wage is not a recipe for workers' welfare in Pakistan. As per Labour Force Survey 45.1% of the Labour force is in Agriculture, 7% in construction, 13.7% manufacturing. All these sectors have large part as informal economy. Regardless of how much the minimum wage is settled, since independent contractors are not "employees" thus not covered under the govt. shining scheme. Minimum wage is a big thing to talk about, the contract workers in Pakistan don't even owe any overtime because the Salary Paid covers all the time they work. There is no social protection floor. Now what labour is going to face is extended delays in receiving this meager salary. Sectors where still the average wage is below the minimum wage in Pakistan are agriculture, forestry, hunting, fishing, wholesale & retail trade, restaurants & hotels. In addition; 27.7% of the labour force comes under the category of unpaid family workers, 34.9% are self employed and 1.4% are employers. Employment Status (%) 2001-02 2003-04 2009-10 2010-11 Employers 0.8 0.9 1.3 1.4 Self Employed 38.5 37.1 34.2 34.9 Unpaid family Workers 20.8 24.1 29.1 27.7 Employees 39.9 37.9 35.4 36 By: Hira Habib Research Associate @ Pakistan Institute of Labour Education and Research, Ph: (92-21) 36351145-7, 03222884579 Fax: (92-21) 36350345 Email:
Saad Masood Aug 08, 2012 07:17am
Thanks for a nice Post Hira, Can you please confirm what was decided actually to be undertaken, as i just confirmed from the EOBI Lahore office that Minimum Wage rate of Rs. 8,000 is implemented, Superseding the Chief Minister Punjab's Announcement of Rs. 9000 as minimum wage in Punjab.