The minimum wage of a worker has been revised to Rs4,000 from Rs3,000. It is another matter that the revised minimum wage is not even half of internationally accepted scale for life above the poverty line, i.e a dollar a day.
For that bare minimum of $1 a day and a family of five, the wage has to be more than RS9,000 ($1x5x30x60). How many blue and even white collar workers earn that kind of money in wages and salaries? An advertisement in a newspaper attracts long line of MBAs willing to serve for slightly higher than that amount.
But for all those gloomy thoughts, perhaps one of the good things that have happened for the industrial working class after decades of wait is the raise in qualifying wage limit for eligibility to share workers profit participation fund (WPPF). The limit has been revised upward from Rs5,000 to 10,000. The maximum permissible amount of profit share has also been increased from Rs 6,000 to Rs12,000. The pension has been raised from RS1,000 to Rs1,300. Besides some grants from workers welfare fund (WWF) such as marriage grant, death grant and education grants have also been increased substantially. What is more important but still little ambiguous, is the change in the definition of a worker.
WPPF is a mandatory five per cent deduction from pre-tax profit of companies. The government for the last so many years gobbles a big chunk of workers profit participation fund that runs in billions of rupees.
Instead of being paid to workers in whose name it is being collected major chunks of WPPF-in most cases as much as 95 per cent or more of the appropriations— ends up in government coffers. The qualifying criterion of WPPF was mismatched with the ground reality. The qualifying limit for a share in fund was low at Rs5,000 when majority of workers in rules compliant multinational companies earn more than 5,000.
Over the last few years, there were cases where just two persons out of a labour force 12,000 qualified for a share in WPPF that again was restricted to no more than Rs6,000. The profit making company, in question, made appropriation from the company’s earnings in millions but all that amount was deposited with the WWF excepting the Rs12,000 that was given to two qualifying workers.
Majyd Aziz, a senior seasoned businessman who represented employers in the trustees body was unhappy with the criteria, which he felt will still exclude white-collar workers. Most of these categories of workers earn more than RS10,000.
“When everybody partakes in the making of profit why discriminate?”, he asked. Majyd Aziz strongly recommended doing away with the criterion altogether so that five per cent of the pre-tax profit gets distributed amongst all staffers in a profitable entity.
Saeed Ahmed Khan who heads WWF, reached in Islamabad over telephone, was also unable to give the increased numbers of expected beneficiaries after the change in WPPF criterion. He said that local industry is not compliant.
“It is only handful of MNCs and a few big local companies that are fully compliant”. When quizzed about the logic in making a policy that cannot be implemented, the senior officer said that implementation is not his responsibility. “There are other departments to oversee that policies that we make are implemented in letter and spirit”, he said.
Another expert on labour affairs and Chairman Policy Planning Cell Sabur Ghayur was in Karachi, last week in connection with a Workers Employers Bilateral Council of Pakistan (WEBCOP) seminar after the budget.
He told Dawn that government appeared to be serious in implementing labour-related policies. To this end, he said a labour protection policy and a labour inspection policies are in final stages and will hopefully be announced soon. He disclosed that these policies would clarify the detailed mechanism of ensuring implementation.
Sabur Ghayur said according to a rough estimation about three million workers are expected to reap the benefits of changes in the WPPF scheme.
Mr Nabi Ahmed, a veteran trade unionist felt it was too early to comment on this policy. “I am still waiting for the draft of the policy from labour department. I would like to comment only after I have studied it properly” was how he responded to a query. He, however, said that 4:2:1 slabs should be done away with as they are abused by employers as a tool to reward their henchmen and demoralize labour activists.
“The government has not been able to ensure compliance of minimum wage fixed earlier. With trade unionism having dealt the death blow, there is no mechanism in place to enforce pro-labour policy decisions. There is a big mass of workers working for less than Rs3,000 in garments, biscuit, match boxes, bangles, textile factories, etc.
In many such cases, workers are required to work for 12 hours instead of eight hours for a paltry sum in name of a salary_ less than even the minimum wage of Rs3,000. With a long line of job aspirants outside factory gates this vulnerable lot gives up on unionism and succumb to exploitation”, commented a trade union leader Khamosh Gul over telephone from Hyderabad, when asked of his reaction to the steps taken in the budget.
Khamosh Gul felt that Rs4,000 is not enough to support a family of five. “It cannot even feed a family let alone think of a dignified living with provision of basic amenities”. Most other measures related to workers welfare fund were finalized in May 23 meeting of the governing body of WWF. He claims: “These measures were made part of the budget just to make the budget sound egalitarian”.
The labour leader however conceded that because of the changes in WPPF regime that covers unionized workers in Labour Laws compliant industrial units, labour earnings would increase. “Having said all this the budget does provide some relief”, Khamosh Gul felt.
When asked to quantify the prospective beneficiaries of the changes in WPPF the labour leader was not sure. Khamosh Gul who represent workers on the tripartite governing body of trustees of WWF told Dawn that he did not have the data but expected that to be several thousands in numbers. He said that in the last meeting of trustees, where these step were discussed threadbare, number of beneficiaries were not quantified but the body expected WPPF contribution to drop by 50 per cent as a result of the proposed move.
Working people of the country shared the pains of structural adjustment programme all through 80s and 90s. Now as result of what Mr Burki calls in another context “a combination of accident and instinct and less by strategic design” the economy seems to be performing well. The gains of growth should also therefore be distributed equitably.
It is hard for critics of quasi-democratic set up to accept the fact that Musharraf Aziz government was capable of doing whatever little relief it announced on June 5 for the people. It is now up to the government to prove skeptics wrong by implementing budgetary commitments in letter and spirit.