Op-ed: The minimum wage dilemma in Pakistan

Millions of home maids, private school teachers, security guards, sanitary workers, laborers make major a component of Pakistan, providing them with wages that suffice their needs will enable them to be active contributors to the society.

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Standing in a queue along with other beggars at Seylani, a charity food giver in Karachi, Pakistan, he was in a shabby uniform of a security company. I did not greet him should he not want to be embarrassed as we used to know each other for a while.

Akram (name is changed) was a father of 5 and educated up to matriculation, was hired by a security company giving services to big corporate clients as third-party contractors. Akram gets a meagre US$ 53 only as a monthly wage.

Every laborer is actually an entrepreneur who earns and, in turn, spends on food, clothing, schooling etc for family so millions of transactions happen all around and economy booms.

Though his employer (Security company) receives Rs. 17,500 equivalent to US$ 105 per month plus service charges and plus taxes, however, the contractor pays these poor guards half of this amount and retain the remaining amount as their profit and the poor laborer is left with the least of options to make the ends meet.

Read more: Ensuring Food Security in Pakistan

Bushra (name is changed) is a widow from Karachi and a schoolteacher in a middle class vicinity for more than 20 years now. Apart from teaching, she does office work as well, like fee collection and admin related assignments. The school owner gifts a house to her own daughter lately while Bushra gets Rs. 10,000/= (US$ 60) monthly salary after 20 years of service. Interestingly, she is known to be a well-paid teacher among other school teachers and one can guess that the other teachers might be drawing even lesser than Rs. 10,000  (60 US$) a month.

Every laborer is actually an entrepreneur who earns and, in turn, spends on food, clothing, schooling etc for family so millions of transactions happen all around and economy booms.

Great entrepreneurs pay handsomely to workers

Nick Hanauer, is a successful entrepreneur in USA who has managed, founded, or financed over 30 companies across a broad range of industries. In June 2014, Hanauer wrote an op-ed for a magazine in which he foresaw pitchforks coming for his “fellow .01%ers” if they do not address the issue of increasing wealth inequality. He noted how it would result in the destruction of the middle class and damage the wealthy class. He made comparisons to the period preceding the French Revolution in the 18th century.  He has been a vocal advocate of increasing the minimum wage in USA to $15 an hour, helping to kick off the nationwide movement that has increased the minimum wage in 21 states.

Read more: Op-ed: Here is what Pakistan can learn from tiny Tanzania for economic prosperity

Henry Ford was an American industrialist and business magnate, founder of the Ford Motor Company, He is credited with “Fordism”: mass production of inexpensive goods coupled with high wages for workers. Ford was a pioneer of “Welfare Capitalism”, designed to improve the lot of his workers.  Ford astonished the world in 1914 by offering a $5 per day wage ($130 today), which was more than doubled the rate of most of his workers. A Cleveland, Ohio, newspaper editorialized that the announcement “shot like a blinding rocket through the dark clouds of the present industrial depression.” The move proved extremely profitable; instead of constant employee turnover.  Ford’s policy proved that paying employees more would enable them to afford the cars they were producing.

Millions of home maids, private school teachers, security guards, sanitary workers, laborers share major a component of population, providing them with wages that suffice their needs will enable them to be active contributors to the society.

In Pakistan’s shipping industry, a veteran and very popular among his subordinates has been Capt. Changez Hassan Niazi who remained CEO (Pakistan) of APL (world renowned shipping company), KICT, a port terminal at Karachi port and just retired after heading DP World Pakistan (Port Qasim terminal operating company). Capt Niazi has been famous for paying lucrative perks and privileges to his subordinates and, as such, the companies he headed always remained highly efficient and always flourished since the employees always own their work.

Read more: Pakistan’s banking sector must address poverty alleviation: Governor KPK

In 1997, NOL, Singapore’s national shipping line, made an $825 million acquisition of American President Lines (APL) whose heritage dates back to 1848. In APL Pakistan (headed by Captain Niazi), the salaries of APL were higher than NOL, they salaries were expected to be lowered down to NOL level, however, Capt. Niazi took a stand and did not let the salaries of his staff get lowered instead salaries of NOL had to be raised to bring them at par with APL salaries being one company now.

Immediate Action

As per minimum wage boards recommendations of all provinces, minimum wage for unskilled laborer is averaging Rs. 17,000 Pak rupees per month across all provinces which is actually a Minimum wage and, certainly, not a minimum living wage that also needs to be assessed afresh and under no circumstances should any variable or incentive allowances or value of welfare facilities be permitted to be adjusted against the minimum rates wages

Millions of home maids, private school teachers, security guards, sanitary workers, laborers share major a component of population, providing them with wages that suffice their needs will enable them to be active contributors to the society.

Read more: Hafiz Pasha: PTI is pushing Pakistan into abject poverty

Minimum wage implementation falls directly upon the officials responsible for approving the bills of the contractors, however, that constitutes a fraction of such massive number of laborers. All readers are requested to disseminate, talk, check, discuss with people one may come across, so that minimum wage becomes a norm and impact of wealth inequality becomes less harsh for the poorest of the poor.

Mushtaq Jumma is an Ex-Airliner and Business Consultant. The views expressed in this article are the authors own and do not necessarily reflect the editorial policy of Global Village Space.

 


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