Labour Day thoughts

15 days ago

Business Recorder

Do you think the country’s labour class, especially daily wagers, spent the Labour Day holiday celebrating and commemorating their “struggles for fair wages and better working conditions”? That is, after all, how the ILO (International Labour Organisation) says they “renew their commitment to social justice”.

But what’s to celebrate or commemorate when every Labour Day sees them facing higher inflation and unemployment; subject to an unforgiving, decaying social structure? This class, especially in its bloated, overcrowded depths where most of the country’s (fifth largest in the world) population languishes, interprets some economic statistics, especially important ones, a little differently than the government, academics and investors.

For example, even as officials take credit for inflation finally dropping below 20pc and investors position to gobble the next rush of money in the market – especially after SBP finally cuts rates at the next MPC – a few points down from CPI’s historic peak makes no difference in their lives. They’ll only begin to notice it once inflation declines consistently, along with an increase in overall production, and then these forces filter through the real economy and trickle down to them.

Good luck with that with another IMF programme round the corner. This class knows best that household budgets shrink whenever the government boasts signing another bailout programme. All the taxes, tariffs and subsidy-cuts of an EFF (Extended Fund Facility) will ensure another round of cost-push inflation – which will begin to show sooner than the second tranche of the Facility will be due – the ultimate cost of keeping the country from defaulting.

And that will further feed the lament that the working class is punished for the sins of the country’s leaders; that workers continue to pay, quite literally, for politicians enriching themselves and leaving Pakistan in a debt trap.

It’s instructive that even after the last EFF was cancelled and default became a very real concern all over again, the emergency SBA (Standby Agreement) was only seen through by savagely taxing the middle- and lower-income classes; to the point that a sudden 40pc jump in electricity bills last August triggered protests up and down the country.

And even now, there’s not much to suggest that the government is about to give up its habit of relying on indirect taxes – which hurt the poor a lot more than the rich – and finally tax the real estate, agriculture, wholesale and retail elite; whose deep pockets and deeper connections always keep them insulated from the taxman.

It’ll do no good to look to Islamabad for relief. All you’ll get from there is the fallout of Dar sb’s sudden elevation to deputy prime minister and all the implications of Baray Mian sb suddenly queening his pawn for relations within the party, with the opposition, and especially with the powerful establishment.

Workers could protest, of course, but without proper labour unions the best to be expected is coming out, getting tear-gassed, and going back home to pay those unaffordable bills, just like last year. And there are no unions because the state never let them have any, and the few that could mobilise quickly turned into circuses, bickering over things like which country’s interpretation of communism they liked more. That’s another long story.

Besides, they couldn’t do it now if they wanted to. Proper labour protests require time and money, and workers cursed with paying inflated bills with shrinking wages have neither. Why skip work, go out in the heat, get beat up and possibly arrested by the police, and even then make no difference at all?

The labour class ought to feel insulted that no administration in almost 80 years could prioritise a progressive, enforceable minimum wage structure yet every Labour Day front pages are littered with the president’s and prime minister’s promises and claims about worker rights and minimum wages. But, then, what are they going to do about it?