AFWA report: Wage theft and pandemic in Pakistan
In 2020, while the majority of the newspapers featured ads and reports from industrialists praising the government for support throughout the pandemic, garment factory workers were experiencing wage thefts at high levels and the situation continues up to the current date.
On Thursday, Asia Floor Wage Alliance (AFWA) released a 193-page report centering on Covid-19 relevant wage theft in the global garment supply chains. In Pakistan, the factory owners refused 244,510 workers from a sample of 50 industrial units $85 million wages due to order canceling and non-payment of current orders by global brands. Workers have the right to wages and benefits, thus this contributes to wage theft.
The report consists of a survey: involving 605 workers from about 50 garment factories in Faisalabad, Lahore, and Karachi. Approximately 96 percent of the sampled factories hired above 1,000 workers. The report says, “Workers consistently endured wage theft during the years 2020 and 2021, with no real indication of improvement.”
The survey unveiled that all garment factory workers faced an impact on their work; 86 percent experienced layoff and 14 percent terminations. The workers also informed that in 2020, a total wage theft of 29 percent occurred, which is a drastic decline of 61 to 69 percent in wages during the lockdown from March to May and a 26 percent decline in June till October.
The survey also added that workers who had work experience of five years did not have sufficient savings to survive a layoff of one month. The affected workers had to live by decreasing consumption, acquiring debt, or giving away assets. March and May of 2020, 81 percent of the workers went below the poverty line defined by the World Bank, which was $3.20 a day.
According to the interviews, the garment workers faced layoffs and did not get any financial assistance for one or two months from anyone. Most of the workers fired did not get the lawfully mandated severance money. The workers who were re-employed noted an escalation in overtime work without pay compared to the previous year.
Utilization of subsidised loans not sufficient
The State Bank of Pakistan established Rs238 billion for wages in 2020 as subsidised loans. However, the report states that benefits from these programs were not efficiently given to the workers as wages.
Although owners are obligated to pay twice the standard hourly amount for overtime work, all workers surveyed were given the legally mandated rate for their overtime even before the pandemic.
The report further wrote that the provincial-level Employees’ Social Security Institutions or ESSIs (PESSI in Punjab and SESSI in Sindh) grants permanent workers to have health services and cash bonuses. Employers are compelled to provide to both plans under the law still about 65 percent of the workers did not get social security advantages even before the pandemic. The numbers showed a rise during the lockdown leading up to 80 percent of workers telling that they did not get SESSI/PESSI’s health or cash benefits in April and May.