MINIMUM WAGES

MINIMUM WAGE:

A minimum wage is the lowest remuneration that employers shall legally pay their workers.

The Minimum Wages are calculated so that an employee can reasonably maintain his family for a month.

In Pakistan Minimum Wages are Rs. 15,000/- this is far short of amount required to maintain a family for a month.

Spartan Family Budget for a family of 5 is Rs. 37,000/- (on the basis of cost of living in the month of April 2016.) Copy attached.

Henry Ford was founder of Motor Company, in January 5, 1914 he announced that he will pay US  $ 5 per day to his employees as against the then prevailing wages of $ 2.34 per day.

His friends tried to revise his decision. He hit the jackpot when he declared “I want my workers to be my customer”. Thus he put America on the way to consumer economy

The logic is simple. Minimum Wage earners spend entire earning, increased wages mean more spending. More spending mean more demand for goods and services giving impetus to economy, resulting in more jobs and more taxes.

I have no data, but my hunch is that increase in minimum, wages will increase cost of production only marginally this can easily absorbed by curtailing other expenses.

Now who will take the bold step and become Henry Ford of Pakistan?

The increase may be in two stages, at first an increase of Rs. 10,000/- to Rs. 25.000/-

Then again another increase of Rs. 12,000/- to Rs. 37.000/- ;

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