KARACHI: The business and industrial community in Sindh has expressed strong opposition to the provincial government's proposal to raise the minimum monthly wage to Rs 42,000. Junaid Naqi, President of the Korangi Association of Trade and Industry (KATI), has dismissed the proposal, arguing that it could harm the region's economy, industrial development, and job creation.
Naqi emphasized that economic policies should align with current macroeconomic conditions. He noted that with the national inflation rate at a low of 6%, the rationale for such a wage increase is questionable. He highlighted that minimum wages in Punjab and Khyber Pakhtunkhwa are between Rs 37,000 and Rs 40,000, and if Sindh sets its minimum wage at Rs 42,000, it would be the highest in the country. This disparity could lead businesses to relocate to provinces with lower costs, affecting investment and employment in Sindh.
Naqi elaborated that even with the current minimum wage of Rs 37,000, the total cost per worker already surpasses Rs 61,000 per month. This figure includes contributions to EOBI and SESSI, annual bonuses, gratuity, leave payments, overtime, and other employee benefits. If overtime increases to 48 hours, the cost could exceed Rs 69,000, making Sindh-based industries less competitive.
He also pointed out the financial and operational pressures industries in Sindh are experiencing. Naqi cited reports indicating that 80% of industries in Sindh do not comply with minimum wage laws, with many workers, especially in the informal sector, receiving less than legal wages.
Naqi warned that this situation fosters social injustice and unrest, with informal businesses creating unfair competition for compliant ones. He stressed the need for effective enforcement of labor laws to ensure fair wages and prevent industries from relocating to other provinces.
He urged the Sindh government to set minimum wages between Rs 38,000 and Rs 40,000, aligning with national inflation and other provinces to avoid overburdening the industrial sector. Naqi also called for better implementation of labor laws and advocated for a phased transition to a "living wage" model through consultation among stakeholders.
Concluding his remarks, Naqi emphasized linking wage policy with industrial infrastructure availability to maintain Sindh's competitiveness. He appealed to the government to make economic decisions based on practical realities to safeguard the province's economy and job market.