How growing pay gap threatens economic stability

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LAHORE: Salary inequality has become a growing concern in Pakistan, which reflects the trends in developed economies, where the difference between the lowest and most earners has expanded significantly. The absence of tough policies to manage the executive salary and ensure fair wages has increased this difference.

Pakistan’s width salary is not just an economic problem – it is also a social and political challenge. If abstinence is left, there may be more unemployment, mental tract and social unrest. A balanced wage policy that ensures fair income in all economic classes for sustainable development.

In some government -run institutions, the salary difference between the highest paying officials and the lowest paying workers has allegedly reached the ratio of 100: 1. Senior officials, including the CEO of public -owned businesses (SOE), receive a profitable compensation package containing high basic salaries, facilities, bonuses and allowances. On the contrary, lower -level employees such as clerk and auxiliary staff often earn a minimum wage, which is insufficient in view of the increasing inflation and the rising cost of life. For example, a senior official of the SOE or regulatory authority can earn Rs 3 to 4 million a month, while a lower -level employee in the same organization earns about Rs 37,000 to Rs 42,000.

In the private sector, the difference is even more clear, with the CEO and executives earning 200 to 300 times more than the junior employees. For example, some bank CEOs receive a salary of Rs 10-20 million per month, while admission level staff like Taylor and clerks earn between Rs 30,000 to Rs 50,000. Senior executives of the multinational corporations (MNC) working in Pakistan enjoy salaries compared to developed economies, while junior staff members pay significantly less.

Industrial laborers, especially in the clothing sector, earn closer to the minimum wage, while well -known textile firms make millions of business owners and executives. On the contrary, lower -level employees feel less value, which negatively affects productivity and increases staff business.

Anger increases when the lower -level workers strive to afford basic needs, while executives guide a lifestyle. The wealthy collects more money, while the poor are trapped in low wage jobs, which have limited movements of the above movement. Historically, salaries have sparked labor movements and strikes, especially in textile and banking sectors.

Inequality in severe income also weakens domestic demand. When the majority of workers barely earn enough to survive, discretion costs decrease, reduction of goods and services demand and slowing business growth. If a small elite controls most of the wealth, the investment focuses on luxury markets rather than a wider economic expansion. Small and medium -sized businesses (SMEs) face when workers lack the purchase power to buy locally manufactured goods. In the manufacturing sector, many employees get minimal wages, and limit their contribution to domestic consumption growth.

Pakistan also faces brain drains, as skilled professionals want high salaries abroad. When industries receive significant salaries in the Middle East, Europe or North America, they migrate, and spoil the country’s capabilities. Employers strive to maintain skilled professionals when they cannot offer competitive salary to medium staff. For example, IT professionals often leave Pakistan for better compensation opportunities in Dubai, Canada, or the United States.

In addition, inadequate wages attract workers to informal, non -documented jobs, which reduces tax revenue. Customs, law enforcement agencies and low -paying employees in the tax department can resort to bribery to increase their income, and further weaken the rule. Employees who look at wide executive salaries but they experience stable wages, demolish themselves, which reduces productivity. High business rates force companies to spend more on recruitment and training, increasing operational costs.

To reduce the negative effects of salaries inequality, the government should introduce progressive taxes on excessive executive salaries, and use taxes to fund workers’ benefits. Companies should be encouraged to distribute a portion of their profits into all employees, rather than fulfill their higher executives. Workers should have the right to collectively discuss fair wages and benefits. Businesses should invest in promoting their manpower to justify more salary.

The government has to enforce wages reforms, which aims to reduce the salaries of government businesses by supporting executive salaries. Without decisive action, Pakistan is at risk of deepening economic inequality, stopping development and accelerating social unrest.