Labour leaders need lateral-thinking

Labour leaders need lateral-thinking

By Babar Ayaz

For a journalist it is always good to attend subject specific conferences and seminars because it helps in focusing on the topic and stimulates one’s thoughts on that particular subject without disturbance. It also helps in collecting good information and in having an access to knowledgeable participants. Unfortunately, many journalist do not avail this opportunity.

Last week I attended the two-day labour conference organised by HRCP in Karachi. Some of the major issues that were discussed at the conference were: decline in trade unions membership and their effectiveness; rising trend among the employers to engage contract labour; non-implementation of minimum wages by the majority of the employers; discrimination against the women workforce and lack of adequate data regarding working women; and privatisation.

Now let’s look at these issues briefly. One, the declining role of trade unions and their membership is not typical problem in Pakistan, barring a few countries, this is a global phenomenon.  In Pakistan according to a PILER report of 2006 “the number of registered unions has declined from a total of 1,635 in 1995 to 1,202 in 2002 and the membership has declined from 340,569 to 138,456 during this period. The drop in the number of registered unions is most marked in textile, banking, municipalities and food sectors… At present, according to an estimate, less than five per cent of the workers in the formal sector are unionized. Officially the formal sector accounts for only 30 per cent of the employment outside agriculture.”

Why trade unionism is on the decline is a crucial question but is not fully discussed. Most of the trade union leaders blame the external factors like disabling legislation and repressive practices; ban on trade union activities. In the private sector, the common tactics is to transfer regular worker’s jobs to contract workers. This trend is on the rise because private-sector employers can then save themselves from contributing to health and employees’ old-age benefits besides the workers welfare fund.

But that does not seem to be the only reason; the employers find that in many cases the remuneration when attached to the productivity gives them more production. In some industries where workers are paid on the basis of their production they fetch much higher money than working as a regular worker at the factory. It’s the cash in hand that matters to them, while other health and pension benefits are not factored in by them.

Number of other factors need to be discussed and researched by the labour leaders and their organisations for instance: the rapid ongoing trend of automation of the industry has also reduced the need for a large workforce at the factory floor; this has also resulted in the employment of educated workforce who are either technically qualified or are trained by the employers. While the employers give them socially fancy titles to keep them away from the trade unions, these educated workers also prefer to label themselves as part of the officers or managerial team.

Labour leaders should also brainstorm with the economists to understand the inevitable impact of globalisation on our society and do some lateral thinking on how to get a better deal for the workers in the given economic environment of the world. Mere rejection of globalisation won’t help the working classes whose interests they want to protect.

A few decades ago we did criticise that while the finance capital has no national boundaries, the workers are restricted within their national borders. But today it is in the interest of world capitalism to outsource the labour intensive jobs where comparatively labour is less expensive. In this highly competitive world the working classes have to do a lot of rethinking with an open mind instead of the existing dogmatic approach. We cannot catch the imagination of today’s youth who is exposed to the globalised world. They don’t buy the dreams that the economic system can be changed even in the distant future. Today’s youth is impatient because the rhythm of time has changed with the advent of new technologies. They want quick results for which our labour leaders would have to think afresh.

The service sector’s contribution to GDP is 53.8%. It employs 36% of Pakistan’s workforce, only behind the agriculture sector which employs 42% of the workforce. In the absence of a strong service sector and agriculture labour trade unions need a stronger movement for the labours’ rights as possible. As a matter of fact the sectors get the least attention by the labour leaders.

Another important factor that has to be kept in mind while drawing a strategy for the working people is that 99% of economic establishments in the country fall in the category of small and medium. This sector employs a much bigger workforce then the organised industrial sector which is usually a point of focus of the left, although the SMEs employees are more exploited than those working in large establishments.

According to two studies done by independent economists the level of illegal and parallel economy in Pakistan is around 91% of its GDP (Kemal and Qasim 2012). It is one the major problems of Pakistan. This undocumented economic sector does not pay taxes which is the big reason of lack of revenue collection and has no respect for labour laws. Though as small and medium entrepreneurs they can be allies of the working people on many issues in politics, at the same time they have to be pushed to pay taxes and abide by the labour laws.

The conference resolution also opposed privatisation as the focus of the labour leaders was saving the jobs of the public sector businesses which are on the list of the privatisation commission. But will the workers opposition be able to stop the process of privatisation is doubtful. Most of the public sector companies are not run as a business but have been used by successive governments to park the unemployed supporters in these companies and to favour their crony brought rates and businessmen. As a result these companies are bleeding and the government has to subsidise them to the tune of around Rs300 billion every year. Where does this money come from? Indeed from the budget. This is at the cost of the whole nation. The government resorts to borrowing to finance these sector units which in turn creates inflation — a worst across-the-board tax on the people. So the apparent trade-off here is either to save the jobs or to continue financing the sick companies. If the workers want to stop privatisation they will have to come up with alternate solutions and seek representation at the newly created independent board of management which has clear plans for turning around these sick units. Mere opposition would not get public sympathy as these companies are seen as a liability by the people.

The writer can be reached at

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