The case for fair wages – Business

Pakistan is grappling with its highest inflation rate in almost half a century. Over recent months, inflation has surged to as much as 38 per cent, marking the highest rate in South Asia. Food inflation has skyrocketed to 48pc, reaching its highest level since 2016.

The government significantly devalued the currency by more than 50pc within a year and eliminated subsidies as part of the latest instalment of the International Monetary Fund bailout package. Consequently, the nation is facing a severe cost-of-living crisis.

In a country where economic challenges often overshadow the daily lives of its citizens, the concept of fair wages has emerged as a beacon of hope. Pakistan, like many developing nations, faces the uphill task of addressing poverty, inequality, and social disparities due to the inflation mentioned above.

At the heart of these issues lies the question of how much workers are paid for their labour. Private sector corporate giants need to hold discussions surrounding the importance of fair wages and living incomes and why Pakistan needs to prioritise this crucial aspect of economic justice.

Unfair informal sector wages lead to cyclic poverty as workers toil for long hours and remain unable to afford necessities

A fair wage is not merely a number on a pay slip. It represents the dignity and value of human labour. It ensures that individuals can afford necessities such as food, shelter, healthcare, and education for themselves and their families. In Pakistan, where a significant portion of the population struggles to make ends meet, fair wages can make a world of difference.

Imagine a scenario where a worker earns a wage that barely covers the cost of rent, let alone other essential expenses, after toiling for long hours. This is the reality for many in Pakistan’s workforce. Without fair wages, workers are trapped in a cycle of poverty, unable to break free and improve their lives. This not only affects individuals but also hinders the overall development of the country.

One might argue that increasing wages could lead to higher business costs, potentially impacting profitability. However, the benefits of fair wages far outweigh the costs. When workers earn enough to meet their basic needs, they become more productive, leading to increased efficiency and quality of work. Moreover, higher wages translate into greater purchasing power, stimulating demand for goods and services and driving economic growth.

Paying fair wages is not just a moral imperative but also a legal obligation. The Constitution of Pakistan guarantees the right to fair wages and equal remuneration for equal work.

However, this right remains elusive for many, especially those working in the informal sector or as daily wage labourers. The government and businesses alike must ensure that this fundamental right is upheld and enforced across all sectors of the economy.

Several organisations have made various efforts to implement fair wage policies. These initiatives range from setting minimum wage standards to providing inflation adjustments and comprehensive benefits packages. Such measures not only benefit workers but also contribute to employee satisfaction, retention, and, ultimately, organisational success.

A salary is not merely a number on a pay slip but represents the dignity and value of human labour

It is important to note that fair wages contribute to social cohesion and stability. When workers are paid fairly, they feel valued and respected, leading to a more harmonious workplace environment. This, in turn, reduces the likelihood of labour disputes and strikes, fostering a conducive atmosphere for business operations and investment.

Fair wages are also essential for reducing income inequality, a pressing issue in Pakistan. The gap between the rich and the poor continues to widen, exacerbating social tensions and hindering social mobility. By ensuring that all workers receive fair compensation for their labour, Pakistan can take significant strides towards narrowing this gap and building a more equitable society.

It is worth noting that fair wages are not just a matter for the private sector; the government also has a crucial role to play. Through policies and legislation, the government can create an enabling environment for fair wages to thrive. This includes enforcing minimum wage laws, promoting collective bargaining rights, and incentivising businesses to adopt fair wage practices.

Investing in education and skill development is essential for ensuring that workers are equipped to command fair wages. By improving access to quality education and training programs, Pakistan can empower its workforce and enhance its productivity and earning potential.

The importance of fair wages serves as a wake-up call for Pakistan to prioritise this critical issue. Pakistan can create a more just, prosperous, and sustainable future for all its citizens by ensuring that all workers receive fair compensation for their labour.

Fair wages are good for workers, businesses, communities, and the nation as a whole. It is time for Pakistan to take bold steps towards making fair wages a reality for all.

The writer is the head of content at a communications agency.

Published in Dawn, The Business and Finance Weekly, April 29th, 2024