Dr Hafiz A Pasha

The International Workers Day is on the 1st of May. This is an appropriate time to review the working conditions of labour in the country. In particular, the focus has to be on the prevalence of ‘decent work’ in the labour market of Pakistan. Decent work, according to the ILO, represents opportunities for work that is productive, delivers a fair income, security at the workplace and social protection for families. It provides better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives.

The estimate of the size of the labour force in Pakistan is 61 million, according to the latest Labour Force Survey by the Pakistan Bureau of Statistics in 2014-15. There are 46.7 million male and 14.3 million female workers. 42 million workers live in rural areas and 19 million in urban areas.

The first aspect that needs to be highlighted is the unfortunate dark side of the labour force in the form of child or bonded work. Child workers, in the age group of 10-14 years, are estimated at 1.4 million in 2014-15. A positive development is that the number of child workers has declined by almost half since 2008-09. 56 percent of the child workers are male and 87 percent are resident in the rural areas.

Bonded labour is present in some sectors like agriculture, brick kilns, fishery and mining. They are subject to all kinds of exploitation, including physical abuse. ILO estimates that the number of bonded workers in Pakistan is in excess of 2 million.

The next key statistic is the number of workers in marginal occupations and economic activities, viz., subsistence agriculture, own-construction of one’s dwelling, etc. Conventionally, these persons are considered out of the labour force. Their number stands at 7.2 million in 2014-15. A positive trend is that the number of such workers has also declined by 27 percent after 2008-09.

A large part of the labour force works in the informal sector in Pakistan. Conditions of ‘decent work’ are seldom satisfied in the informal sector. Wages are low and variable, the working day is characterized by long hours of work, job security is minimal and the working environment has health and other hazards. There is also little or no scope for collective bargaining.

Almost 73 percent of non-agricultural workers have jobs in the informal sector in activities related to construction, wholesale and retail trade, road transport and social and economic services. In 2014-15, the number of these workers was 24.6 million. It has grown by 18 percent since 2008-09 as compared to the overall growth of total number employed of 13 percent. As such, more jobs are being created in the informal sector than in the formal sector. This increases the likelihood that the share of the ‘working poor’ is increasing.

The unemployment rate is consciously understated in Pakistan by the PBS. It is reported at even less than 6 percent in 2014-15. However, if allowance is made for the ‘discouraged worker effect’ it approaches 9 percent. It is especially high in urban areas and among female or highly educated workers. For example, workers with a degree or postgraduate qualification currently face an unemployment rate of almost 20 percent.

Turning to working conditions, the first is the number of hours worked on average per week. The normal standard is 35 hours a week. However, a large proportion of workers are either ‘overworked’ or ‘underworked’. Among employees, almost 40 percent put in over 48 hours a week. The corresponding percentage for the self-employed is as high as 53 percent. At the other end of the distribution, underemployed workers have a share of 8 percent. Such workers are employed part-time and most are likely to be getting low wages.

Another important indicator is the exposure to hazardous work. A perhaps shocking statistic is that 4 percent or 2.2 million workers were injured or afflicted by disease due to the conditions in the working place in 2012-13. Here again, there is some improvement and by 2014-15 the incidence of injury/disease has declined to 2.7 percent of workers.

A fundamental element of ‘decent work’ is if the employment provides a fair income and a living wage. Unfortunately, this is not the case for the majority of employees in the country. In 2014-15, the minimum wage was Rs 12000 per month. The Labour Force Survey reports that a staggering 56 percent of the employees in Pakistan earn less than the minimum wage. However, this is the stark reality and highlights the exploitative nature generally of the employer’s relationship with his/her employees.

The next question is, have real wages been at least increasing over time? Here again, between 2008-09 and 2014-15, there has been a hardly one percent increase annually, irrespective of the skill level of the worker. During this period, there has simultaneously been a two percentage point increase annually in labour productivity in the non-agricultural part of the national economy. Therefore, half the gains in productivity have been pre-empted by employers.

This brings up the issue of the extent of collective bargaining. The trade union movement is extremely underdeveloped in Pakistan. According to the ILO, the total membership in trade unions is not even one million or less than 2 percent of the total working population. This compares adversely with 33 percent in India and 59 percent in Turkey. Clearly, the presence of collective bargaining has not affected the quality of the working environment or competitiveness of these countries. The fundamental question is why the process of formation of trade unions has remained so retarded in Pakistan. It had received a strong fillip in the government of Prime Minister Zulfiqar Ali Bhutto in the 70s but was rolled back in the aftermath of the military takeover.

The final question is whether the legal framework in the country promotes ‘decent work’ or not. Following the passage of the 18th Amendment, labour-related functions are mostly with provincial governments. There are existing laws on payment of minimum wages, restriction of child and bonded labour, etc. But the basic problem lies in their lack of implementation. There is need to strengthen the Provincial labour departments and the operation of labour courts.

Overall, there is not much to celebrate on the 1st of May. Hopefully, the number of jobs created and their quality in terms of adherence to ‘decent work’ will be a major issue in the forthcoming election campaign. The quality of life of millions of families in the country largely hinges on improvement in the functioning of the labour market and to a higher and more inclusive process of growth in the country.

(The writer is Professor Emeritus at BNU and former Federal Minister)