PIDE proposes Rs45,000 minimum wage

ISLAMABAD: Pakistan Institute of Development Economics (PIDE), a state-owned think tank, has asked the government to increase the minimum wage by at least 12.5 per cent to Rs45,000 and ensure its rule-based enforcement, rather than a notional announcement, given the country’s economic conditions and inflationary pressures. “In a period marked by persistent inflationary pressures, food and energy shocks, labour market informality, and rising household vulnerability, minimum wage policy must evolve into a credible macro-social policy instrument capable of protecting workers while remaining economically sustainable and administratively enforceable,” PIDE said in its policy note to the government ahead of FY27 budget. This policy brief called for a shift from discretionary and symbolic annual wage announcements towards a transparent, rules-based framework grounded in official evidence and aligned with International Labour Organisation principles. “Rather than relying on a single indicator or arbitrary adjustment, the proposed approach combines purchasing-power protection, worker-family adequacy checks, labour-market affordability, partial productivity sharing, and provincial implementation realities,” it said, adding that the proposed reform architecture was based on four linked elements: transparent evidence-based wage setting, bounded provincial calibration, credible enforcement and compliance mechanisms, and annual reporting on wage-setting evidence and implementation outcomes. Govt think tank urges rule-based enforcement, not symbolic announcements Last year, the Centre made a departure from even a symbolic minimum wage announcement, and Finance Minister Muhammad Aurangzeb then said businesses were unwilling to pay even the previous year’s minimum wage. The institute said that the application of the minimum wage framework to official data from the Pakistan Bureau of Statistics (PBS) and the Ministry of Planning, Development and Special Initiatives, suggested “a nati