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Businessmen object to minimum wage increase in Sindh

Incomes increased from Rs17.500 to Rs25,000

SAMAA | - Posted: Jul 29, 2021 | Last Updated: 2 months ago
SAMAA |
Posted: Jul 29, 2021 | Last Updated: 2 months ago

Photo: Online

The businessmen in Sindh particularly of Karachi are ‘highly aggrieved and perturbed’ by the Sindh Government decision to increase the minimum wage from Rs17,500 to Rs25,000.

The hike in the minimum wage will increase the expenses of the businesses as they will be paying higher wages to their workers than before.

The businessmen of several industries have shown dissatisfaction with the Sindh government’s decision to increase the minimum wage by 43%.

Over a dozen trade bodies, including the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Karachi Chamber of Commerce and Industry (KCCI), communicated the displeasure of the businessmen in a joint statement.

Pakistan Institute of Labour Education and Research Joint Director Zulfiqar Shah said that there was no scientific calculation for even the Rs25,000 minimum wage and if one calculates, it should be at least Rs40,000.   

“If an average family has six members, one has to calculate how many calories and proteins they need to take daily and how much that will cost. Then there are other expenses such as rent, electricity bill, and gas bill. It can’t be lesser than Rs40,000. The inflation is increasing so no sane person can say Rs25,000 is high,” Shah said.

He added that there was little compliance related to minimum wage, especially in Sindh. He said that there was not a single inspector in the Sindh’s Minimum Wage Board.

Labour rights activist and a former official of the Pakistan Institute of Labour Education and Research (PILER) Shujauddin Qureshi said that the Rs25,000 minimum wage was not high enough.

“ILO (International Labor Organization) made an assessment three or four years ago to provide pension to the affected families of the Baldia factory fire incident,” said Qureshi. “It was assessed that Rs25,500 was a minimum requirement for a family to survive.”     

A total of 264 people perished in the fire that engulfed the multi-storey building of a readymade garments manufacturing unit. “So, you easily assume that Rs25,000 minimum wage is not high. Inflation is increasing and the assessment ILO did was for pension and not wages. Wages are higher than pensions,” Qureshi explained.   

Qureshi added that the businessmen don’t follow the minimum wage regulation and there was no proper check and balance for that too.

But the trade bodies say the significant increase in the minimum wage was making them uncompetitive locally and globally. They say it will give an ‘exorbitant upshot in the cost of manufacturing’ after the increase in the minimum wage since wages or labour cost is a major component in the final product cost.

They said that the action by the Sindh government has compelled the industrialists to plan and shift their industries to other provinces or abroad.

“It will severely impair the national economy as the 54% share of industries of Karachi in national exports will face downfall and the 67% revenue generated mainly from Karachi for the national exchequer and 95% revenue for the Sindh Revenue Board will also decline,” the trade bodies said.

“The gravity of the situation will lead to massive layoffs, unemployment, and a law and order situation,” they said.

The trade organisations said that the Sindh government has created huge division and wide disparity by fixing minimum wage at Rs25,000, whereas minimum wage in the Federal and Punjab province is Rs20,000 and in KP and Balochistan it is Rs21,000.

“Prices of other raw materials like gas, electricity, petrol, and diesel are uniform across Pakistan. How can the industry survive with different wages in provinces?” trade bodies questioned.

Shah of PILER said that although there was little compliance, these industrialists have thousands of workers, and if they are forced to comply with the minimum wage regulation, it will cost a lot to them.

“This is the reason they are so frustrated,” he said.

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