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Industrialists unhappy over heavy increase in minimum wage in Sindh

Protest_again

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May 19, 2019
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Pakistan:
The per capita income has been calculated at Rs246,414 for 2020-21, compared to Rs215,060 in 2019-20, showing a growth of 14.6pc. The per capita income in dollar terms has jumped by 13.4pc to $1,543 during this fiscal year from $1,361 last year.


India:

While India's per capita GDP is estimated to fall 10.5 per cent to $1,877, 2020 fig. (it has fallen though)




That makes India's GDP per capita barely 20%(at 2000 USD) higher than Pakistan, and gap is closing, in 2-3 year time Pakistan will be ahead of India.
The article about India quoted IMF figures from October 2020 update. IMF itself has come up with new update in April 2021 where it says Pakistan per capita as $1543 and India's as $2147. I'll leave it you whether you like it or not.

In any case, Maharastra with a percapita of $3100 is implementing the highest minimum wage (19k pkr) in India. Sindh is trying to match it. You have to decide whether Sindh can compare to that per capita.
 

mikkix

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KARACHI: Sindh government’s proposal to enhance the minimum monthly wage of a worker to Rs25,000 from Rs17,000 has irked Karachi-based industrialists, who fear that either they would have to close down their business in the city or move their units to Punjab, where the proposed minimum wage is Rs20,000.

Commenting on the proposal, they said that industrialists were not taken on board by the government before making such a decision. Punjab government has proposed Rs20,000 as the minimum monthly wage of a worker whereas Khyber Pakhtunkhwa and Balochistan, who are yet to announce their budgets, are unlikely to go for such a big hike.

Chairman of the Businessmen Group and the Council of All Pakistan Textile Association (CAPTA) Zubair Motiwala argued that when the tariff/rates of petrol, diesel, gas and electricity in the entire country were same, then what was the justification of fixing the minimum wage higher in Sindh than in other provinces.

He pointed out that major export-oriented textile units had 5,000-13,000 employees and one could easily understand how deeply the heavy increase of Rs8,000 in every worker’s wage would impact companies’ financial health.


“How would exporters in Karachi compete with Bangladesh, India and other regional countries because of the huge disparity in wages between Sindh and other provinces?” he asked, fearing that industries would have to move to Punjab and some other province under such a situation.

According to him, wages in Bangladesh are 20-25 per cent lesser than in Pakistan.

The Sindh government should find new avenues to provide relief to workers instead of taking such a “harsh” decision which would only harm local production and exports, he said.

Korangi Association of Trade and Industry (KATI) president Saleem uz Zaman termed the Sindh government decision “the last nail in the coffin of the already struggling industrial sector” and said that the proposed hike in the minimum wage was absolutely unacceptable.

He said that an industry with 1,000 employees would have to afford an extra Rs8 million under the head of salaries as announced by the provincial government.

Korangi with 4,500 units has over 1.5 million workers who are employed under permanent, contractual or daily wage categories.

The Sindh government has tried to gain political mileage as compared to other provinces but this would prove disastrous to the Karachi-based industries. “The minimum wage should be uniform all over the country,” he said, adding that the issue of minimum wage fixed by the provincial government would first go to the Minimum Wage Board, which also has representation of the private sector, for further deliberation before implementation.

SITE Association of Trade and Industry president Abdul Hadi said all town associations would discuss the minimum wage issue with the leadership of the Karachi Chamber of Commerce and Industry (KCCI) tomorrow to jointly decide a future course of action.

He said the Sindh government announced the decision without seeking any input from the stakeholders and without taking the issue to the Minimum Wage Board.

“Without taking ups and downs of ongoing businesses into account, the whopping increase in the minimum wage is not possible,” Hadi said, adding that the SITE area is the hub of 4,000 units where over 500,000 people are employed in different categories.

North Karachi Association of Trade and Industry (NKATI) president Faisal Moiz Khan said that many industrialists might have agreed to the minimum wage of Rs 20,000 from Rs 17,000 keeping in view the post-Covid situation in the country but Rs25,000 proposed by the Sindh government seemed to be a political gimmick to appease its voters. “I condemn the move of the Sindh government which is not at a par with other provinces,” he said, adding that North Karachi with 2,500-3,000 units had over 200,000 employees.

Industries, especially exporters, who are already struggling under high utility costs compared to other countries, would find it hard to survive in a stiff market both domestically and globally, according to him.

Executive director of the Pakistan Institute of Labour Education and Research (Piler) Karamat Ali said the decision to raise minimum wage to Rs25,000 should have come from the Minimum Wage Board after a consensus among employers, employees and the government instead of announcement on the floor of the provincial assembly.

“Increases in the minimum wage has been going for the last few years but no authority checks its effective implementation,” he said and claimed that “80pc of workers are still deprived of the enhanced minimum wage”.

He was of the view that the minimum wage should be fixed at Rs35,000 depending on workers’ family members and rising cost of living. “Due to low income, many people compromise on the cost of living.”


Peoples party is a B team of establishment
and bearucracy. Or i would say ppp is under pressure from bearucracy for power lust that's why they are destroying industrialists of the city. Shifting of business from karachi will continue and will move towards Bangladesh kpk and punjab. People now very much aware of what is going on. Establishment is blackmailing ppp only to control karachi not and amazingly they are also using karachiites against sindhis. Shit politics. I hope establishment should stop this game and resolve this issue once for all for the progress of the country and the people not for their own good.
 
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hydrabadi_arab

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That makes it 22-24 % higher for India.

Like suppose if Pakistan GDP per capita is 2000 USD and India's is 3000 USD that makes it 50% higher for India.
Indians are good at math unless they are trolling. Anyway even $1543 vs $1947 is 23% and not anywhere near 40%. Plus minimum wages in Pakistan is higher. Only Indian punjab get close. Cow belt where majority of Indians live have minimum wages half that of Pakistan. Inequality is rampant in India. Not hard to imagine what was the case 10 years ago when our per capita was 20% higher.
 

S.Y.A

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They dont even pay the minimum wage, they just hire on contract and pay wayyyyy less than minimum wage, with no benefits, at all. no medical, no leaves, no vacations, no nothing.

The a-hole saith can just reduce profit margin for himself , or they can just reduce the salaries they pay to higher ups (millions of rupees per month in direct salary and benefits). another thing they can do is to invest in their company and modernize their equipment and machinery, this will also reduce costs related to maintenance and loss of production. but these a-hole saiths are kanjoos of the highest order.
 

HAIDER

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Pakistanis are happy finding ways to destroy their existing industry somehow.
After hourly pay increase in US.. food chains like McDonald's adopts full automation. No human-only robots.
But, industrial still give the labor option, stay or leave. or may increase little wages. It is a massive strike on local industry. Making more room for Chinese products in the country.
 

Zibago

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Well, for industry to survive they need cheap labour unless the quality of labour and industry they work in are high tech. Pakistan's present industry is largely cheap labour driven as such labour charges has to be kept to a minimum. China for decades kept its labour rates at extremely low to attract industries.

That does not mean that everyone will be paid at minimum wage. You start at that level and get progressive pay raises as you raise your talents through experience.

This law is disservice on 2 fronts. One, this will kill few industries and two, it will make surviving industries to hire less and make workers work more.
This will push industries into Punjab where wages are more realistic
 

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