As part of an effort to demonstrate that its Lahore, Pakistan factory does right by its workers, Econscious President Dale Denkensohn released reports of workers’ pay from the winter of 2007-2008 a few days ago. Are their reported wages for full-time 48 hour workweeks — 4600 Pakistan rupees a month, equivalent to 37 US pennies an hour — a “living wage”?
As David Steele explains, there are two ways to answer that question. One way is to create an objective formula that describes “basic needs” including food, housing, and other expenses. The other is to create a consensus among interested parties, including workers and producers, to let them articulate their own sense of a living wage.
So what are interested parties saying about a living wage? Here’s some recent historical background to put producers’ and workers’ statements in context. Since the winter of 2007-2008, the time at which the Lahore factory’s pay reports were generated, the minimum wage in Pakistan has been raised from 4600 rupees a month to 6000 rupees a month, a nominal increase of 30 percent. Unfortunately, the Consumer Price Index in Pakistan rose 23.4% from February 2008 to February 2009; taking into account the months before and after this one-year period, the inflation-adjusted effect of that wage increase has been pretty much wiped out.
Let’s start with a producer communicating about living wage issues. In an interview held in the fall of 2007, Fair Trade Sports producer Scott James was asked what a living wage would be in Pakistan. His answer: “Four times the standard wage paid to adults.” 4 times PKR. 4600 = PKR. 18400 a month.
What do workers in Pakistan think a living wage would be? Niaz Khan, General Secretary of the Ittehad Labour Union Carpet Industries of Pakistan says that a minimum wage of 12000 rupees a month would be appropriate — and points out that the current minimum wage of 6000 rupees is not being enforced. A wide variety of workers’ representatives in Pakistan agree with that standard for a living wage. One source names “Karamat Ali, Director PILER; Farid Awan, General Secretary, All Pakistan Trade Union Federation (APTUF); Mohammed Ali Shah, Chairperson Pakistan Fisherfolk Forum (PFF); Shaikh Majid, General Secretary, Peoples Labour Bureau (PLB) Karachi” as being in agreement on the 12000 rupee a month standard. In the summer of 2008, Pakistanis demonstrated in 30 cities on a range of economic issues, including an increase in the minimum wage to 12000 rupees a month. At a rally in Lahore, Pakistan, Labour Party Pakistan spokesperson Farooq Tariq took to the stage to “demand a minimum wage of 12,000 Rupees with an introduction of unemployment benefit for all unemployed adults.”
While Econscious uses minimum wage compensation at a rate of 4600 rupees a month as an indication workers are given a fair shake, the estimations of a living wage by another producer doing business in Pakistan (18400 rupees a month) and a wide range of labor groups in Pakistan (12000 rupees a month) are much higher. This is a discrepancy that cannot be attributed to the imposition of some kind of American liberal consumer culture; the descriptions of a higher living wage come from a producer and from Pakistanis themselves.