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.
Mushtaq Jumma
 -
October 25, 2020

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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.