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What Does Minimum Wage Get You in Lahore, Pakistan? Something Far Away from the Pakistani Middle Class

I’ve been inspired by the recent willingness of t-shirt corporation Econscious to share some information about one of its factories in Lahore, Pakistan. By inspired, I don’t mean elated. When I look at the income reports for 20 workers in that factory in Lahore for the fall of 2007 to winter of 2008, I’m inspired to dig deeper and find out what the numbers in them actually mean for the people who receive that pay.

The minimum wage in Pakistan during the time of the audit was 4600 PKR (Pakistan Rupees). 4600 Pakistan Rupees converts to US $76.67 in the report’s exchange rate of 60 PKR to the US dollar (this exchange rate overrates the value of the Pakistan Rupee during the period covered the report, but we’ll go with it because it’s a nice round number). Beyond that, overtime was legally required during the period to be paid at the rate of 44.23 PKR/hour for work greater than 48 hours a week. Speaking of rates, I should mention the overall unit of time for the minimum wage in Pakistan. It wasn’t the hour, or the day, or the week. The minimum wage in Pakistan during the time of the audit was 4600 PKR per month.

What did the 20 workers in that Pakistan factory making shirts for Econscious actually earn during that time? Well, I can’t really tell you what they actually earned, because the the text of the audit of that factory in Pakistan is headed with the caveats that “auditors have accepted as true what they have been told by management and employees of the facility,” and that “auditors have accepted as valid documentation provided to them by facility officials, and have made no independent investigation to determine the accuracy or completeness of the documentation.” All I can tell you is what the factory itself reported to the auditors, without confirmation, that the workers earned.

Each worker was reported (remember that word) to have earned the minimum wage for the factory: 4600 RPK per month (equivalent to 37 US cents an hour for a 48-hour workweek) plus the required 44.23 rupees/hr overtime for more than the standard 48-hour workweek in Pakistan (equivalent to 74 US cents an hour). With every worker doing some overtime and the average worker doing an extra 3 hours of overtime a week, the average worker was reported (but remember, not verified) to do about 51 hours of work per week. With an average number of 222 hours worked per month, the average reported monthly pay for the workers in the Lahore factory supplying t-shirts to Econscious was PKR. 5344.75, or $89.08.

What does PKR. 5344.75 a month buy for that factory worker logging in 51 hours a week? I’ll be answering that question in a number of ways over the next few days; let me start by demonstrating just how far away that monthly salary is from a middle-class lifestyle in Lahore, Pakistan. The Human Resource Department of the Lahore University of Management Sciences maintains a cost of living in Lahore page in which it estimates monthly living expenses for people considering coming to work at LUMS and live in Lahore. Its 2006 estimates for monthly expenses in PKR are:

House Rent: 18,000
Utility Bills: 11,000
Car Maintenance: 8,800
Grocery, Food: 13,200
Education Expenses, 2 children: 11,000
Servants and Entertainment: 7,700
Medical: 2,200
Total: 71,900

Clearly, the people who make shirts for Econscious at that factory in Lahore, Pakistan are not going to be making anything close to the money required for the middle-class cost of living estimate by university staff. What workers at this factory in Lahore can afford is a question I’ll start looking at tomorrow.

13 comments to What Does Minimum Wage Get You in Lahore, Pakistan? Something Far Away from the Pakistani Middle Class

  • Tom

    What a surprise, labor is abused the world over.

    • Jim

      If you knew all this already, why were you keeping it a secret?

      Don’t think dichotomously. Labor is more abused in some places than it is in others. There are better choices and poorer choices… and actually a few really good choices, too. Part of the task of an empirically interested person is to uncover the worst, the bad, the better and the good so that people can make informed choices on that basis.

      It is much easier to either say “everything’s coming up roses and daffodils” or “ah, it’s all gone to hell,” because then you don’t have to pay attention.

  • Okay, so we could say that workers can’t be expected to have servants or entertainment, or a car. And we might argue that they’ll have to get along without medical care, and will just sleep in a house with no water, electricity or heat. But food expenses that are more than twice the salary that this supposedly econscious company provides? That’s not very econscious, is it?

    • Jim

      And what kind of house with no water, electricity or heat? That’s what I’ll be talking about next…

      For American middle-class readers who are used to not having servants, I should probably note that in South Asia, it is a very middle class thing to have a housekeeper and a cook, partially because there is such a ready supply of poor people willing to work for very low wages.

  • Shocked

    You mean minimum wage doesn’t make you enough money to live a middle class lifestyle? So what? Why is it suppose to? It is called minimum wage for a reason. These are not middle class workers. They are low income workers. That is the job they have. If they don’t like it they can leave and get a new job.

    Why on earth should a minimum wage paying job provide you with a middle class lifestyle? Growing up I have several minimum wage jobs. It’s part of the process. Guess what? I moved on and got better paying jobs. I worked my way into middle class and kept working my way up. It’s called minimum wage not middle class wage. Seems like a fairly simple concept.

    • Jim

      Oh, please, Shocked. Read the last two sentences of what I wrote. This article is openly framed as a starting BASELINE. Look for articles to follow which hone in on the question of what exactly workers in Lahore, Pakistan earning can afford.

      If you wanted to move beyond your bored, blaze stance perhaps you could get curious and consider the differential. Is the proportional gap between the middle-class and minimum-wage income in Lahore, Pakistan larger or smaller than the gap between middle-class and minimum-wage income in the United States for someone working 51 hours a week?

      And as for your assumption that in Pakistan people move up from minimum wage job, let me share with you the information that all of the workers in this study were fully grown adults, not teenagers working the South Asian equivalent of the Jiffy Freeze.

  • Tom

    i say “it’s all going to hell” BECAUSE i pay attention, Jim. Look, i think what you are exposing and espousing is great, but maybe naive. Corporations are looking for the cheapest labor to exploit – to the extent that it makes very little sense when you look at the overall costs of shipping from these remote locations to their prime market (which is RIGHT HERE).

    We need a new revolution where the workers ARE the company.
    Fuck “management” and CEOs. If corporations were run without all the greed, drama, stress, and tiers of position and power, they might be good for their employees, their stock-holders, and the country. As it is they’ve ruined us by bastardizing democracy for their own gain (the people at the top) in the guise (some ugly and mutated form) of capitalism.

    • Jim

      If you think “it’s all going to hell,” then you aren’t paying attention. In some places, things are getting better. Not necessarily to a point of perfection. But better. The places they are getting better are the places where people aren’t just throwing up their hands and saying ah, hell.

      You can’t get rid of “greed, drama, stress and tiers of position and power,” not even if you get rid of corporations. Greed, drama and stress are human characteristics, so you’d have to get rid of humans to be rid of them. Tiers of position and power are characteristics of every social system from WalMart to the East Bingleberry Food Cooperative, because they emerge from social relations. The key is to figure out a way to structure the social relations of production so that those tiers of position and power reduce inequality and increase opportunity as much as possible.

      In this particular case, I’m not even talking about that; I’m aiming for something much more immediate and practical:

      1) To find out what is going on with a factory in Pakistan producing Econscious t-shirts
      2) To assess the conditions there in relation to a living wage
      3) To share what I know
      4) If Econscious turns out to be running a workers’ paradise, to congratulate the corporation
      5) If Econscious turns out to be exploiting workers in either poor conditions or at a non-living wage, to change the calculation of costs at Econscious to include the cost incurred by aware American consumers making ethical choices

      Go ahead and call that naive, Tom, but I think it’s a better strategy than tearing my hair out, getting upset and muttering that everything’s fucked up.

      If you have a suggestion for another course of action that is practical and implementable (not something abstract like “we need to change everything”), I’d love to see it, because we all could use a bit more of that.

  • Abraham

    Tom is right in saying that Jim has no capability of making rational decisions, having read Jim’s comments I can completely agree with Tom. But Jim did make a point that Tom was unaware of and I am sure that Tom would also agree with Rowan that when one has never lived in Lahore or have any concept of what one’s brain is instructing their fingers to type.

    Lahore is Lahore, new york is new york.

    if you have some mind boggling guru opinion that vaguely could be considered better than mine, well, post it douche bag.

  • Abraham

    Rowan, no one cares where you are sleeping you tramp.

  • yall all stupid 4 real restardoes really aruging on the computer

  • I came for information about Lahore, and got a lesson on human nature

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