Minimum Wages Levels Insufficient To Meet Workers Need

ISLAMABAD, (UrduPoint / Pakistan Point News - 12th May, 2024) The Mnimum wage levels across Pakistan are insufficient to meet the needs of workers and their familie shared in a report reveald by International Labor Organization (ILO).

The provinces have struggled to develop wage strategies and operationalize functional minimum wage-setting boards for evidence-based and balanced minimum wage-setting and the effective implementation of minimum wage standards ,

In a terms of coverage, Pakistan is among 18 per cent of countries with statutory minimum wages which exclude agricultural workers, domestic workers or both categories from the scope of minimum wage regulations, said in a report.

While ,each province has a tripartite Minimum Wage board (MWB) that determines and recommends minimum wages for unskilled workers and, in some cases, industry-based minimum wage levels, their role is constrained by legislation which stipulates that they can recommend rates only after reference by the provincial government. In addition, provincial governments are not obliged to accept recommended minimum wage levels. Therefore, in practice, Minimum Wage Boards do not lead the wage-setting process. Instead, they simply adopt the rates set by provincial governments, which follow the Federal Government’s lead.

Pakistan lacks an evidenced-based system for fixing minimum wages, since provincial legislation does not set out criteria or a formula for Minimum Wage Boards to use to fix minimum wage levels. Existing legislation only provides for broad factors – such as changes in economic conditions, costs of living and other relevant factors – for adjusting the minimum wage at least once every three years, without articulating specific statistical indicators or datasets to be used for this purpose.

Considerable delays also occur in terms of notifying the recommended rates by provincial governments.

Recent years have seen efforts to increase minimum wages for informal workers, such as home-based workers in Sindh and contract workers93 through collective bargaining at the enterprise level, as well as advocacy by workers’ and labour rights’ groups. However, reforms are still awaited in several areas.

Reforms tend to be linked to social protection, which Pakistan’s provinces are keen to expand to meet the 2030 target of universal social protection.In terms of compliance, the implementation of minimum wage provisions in practice has always been a significant challenge, given Pakistan’s vast informal economy. Available evidence shows that provincial governments have failed to enforce established minimum wage levels.As a result, payments below the minimum wage payments are prevalent nationwide.

ILO studies indicate that more than half of workers in the garment, textile and footwear industry – who are the predominantly women – were paid less than the statutory monthly minimum wage.96These trends highlight the need to address multiple pressing issues so that minimum wage policies yield redistributive outcomes, bring uniformity to the system, and enhance overall effectiveness.