The fight for fair wages

LAHORE: Pakistani workers are longing for fair wages, which are generally considered to be compensation sufficient to provide a decent standard of living to workers, including basic needs like housing, food, healthcare and education.

Fair wages are connected to concepts of fairness, equity, and ethical treatment of labour, and are significantly above the legally mandated minimum wage in Pakistan. The minimum wage is the baseline below which employers are not permitted to pay their employees. Entrepreneurs should upgrade their technology and focus on exporting high-value products to earn more and ensure fair wages for their workers.

Most businesses in Pakistan feel constrained in offering fair wages due to several factors, including cost competitiveness. Manufacturing sectors, particularly textiles, rely on low-cost labour to compete in global markets. Increasing wages may raise production costs, making products less competitive, especially against countries with cheaper labour or more efficient technologies.

Pakistan primarily supplies low-cost goods to markets in Europe, North America and other regions. Buyers in these markets may prioritize the cheapest products, putting pressure on local manufacturers to keep wages low. A large percentage of workers in developing countries, including Pakistan, work in the informal sector, where labour laws, including minimum wage laws, are poorly enforced.

Outdated technology in the textile and other sectors reduces productivity, which in turn limits employers’ ability to pay higher wages. When productivity is low, businesses may struggle to offer fair wages while maintaining profitability, especially when competing internationally with countries that utilize more advanced technologies.

From a regional perspective, Pakistan faces challenges in providing fair wages due to high inflation, obsolete technology in many sectors and a large informal economy. Although the minimum wage is set by the government, it is often deemed insufficient to cover the basic needs of workers. Obsolete technology hinders fair wages by limiting productivity. In countries reliant on outdated machinery and processes, productivity remains low, resulting in companies generating less value per worker.

India has a diverse economy with varying wage levels. Some sectors, particularly IT and financial services, offer fair wages; however, significant portions of the population, especially in agriculture and textiles, earn below fair wage levels. While India has strong labour unions, wage disparities persist.

Sri Lanka boasts higher labour standards compared to many other South Asian countries, particularly in its garment sector, which emphasizes ethical labour practices. However, the country has faced economic challenges that have affected wage growth.

Bangladesh, particularly in its textile sector, has some of the lowest wages in the region. Although there have been efforts to raise wages in response to international pressure, they still fall short of what could be considered fair, especially given the high cost of living in urban areas.

Among Pakistan, India, Sri Lanka, and Bangladesh, Sri Lanka may be closest to providing fair wages in certain sectors due to its focus on ethical labour practices. However, none of these countries have fully implemented fair wages across all industries, and the reliance on low-cost labour for global competitiveness remains a common issue. Obsolete technology is a significant barrier to achieving fair wages, as it limits productivity growth.

In Pakistan, the minimum wage is far from a fair wage, particularly in light of inflation and the high cost of living, especially in urban areas. The government’s focus is primarily on setting a minimum wage, but enforcement and adjustments often lag behind economic realities. A fair wage would be higher, considering costs related to housing, education, and healthcare, which are frequently subsidized in more developed countries.