Rising inequality between rich and the poor in Pakistan
June 6, 2016
Free market economy and neoliberal economic policies created huge gulf
According to a recent survey conducted by a reputed audit firm exposed the inequality between the earnings of the CEOs of 27 Pakistani banks and its employees. According to this survey CEO of a bank earn 56 times more than the average earning of an employee. Last year 27 CEOs of the banks earned 16 million dollars ( Rs 1.60 billion) as salaries which is more than half a million dollars per CEO. If compare this with per capita income of Pakistan which is $1561 (dollars), on average CEO of a bank earns 367 times more than an ordinary pakistani citizen.
The gap between the salary and other perks and privileges of a CEO of a multinational or a big national company and its workers is even bigger. The earnings of a CEO falls between $60000 to $100000 per month as the salary of a worker averaged between $150 to $250 per month. So on average CEO earns nearly 700 times more than the workers.
On the other side the gap between the salary of a grade 22 civil servant and lower grade public sector worker is around 1 to 20. Senior civil servants earn 20 times more than the lower grade officials. This inequality between the earnings of elite and working class people has created a huge gulf between them.
The increased gap between the rich and the poor is an international phenomenon
Since the 1980s, when West started neoliberal free market economic policies; the world has never saw such inequality between rich and poor. All the major economies emerged in last two decades including China, India, Russia, South Africa and Brazil etc, made big leap forward in the economy and created trillions of dollars wealth. But all these countries having the largest wealth gap in the world between rich and the poor. The reason is neo-liberal free market economic policies. Some sections of the population did get the share in the wealth and improved their living standards,but rest of the population is still not touched this rapid economic growth and development.
In 1960s, only ten percent (10%) population was use to live below the poverty line in Pakistan. 1990s it went up to 30% and now it is more than 50%. According to one report, one to two percent (1 to 2%) population falls below the poverty line every year. Every decade since 1960s on average put more than 10% population below the poverty line. In last two decades, since the ruling class adopted free market economy and neo-liberal economic policies, the number of people living below the poverty line doubled.
The free market economy and neo liberalism created unprecedented gap between rich and the poor. On the one hand people are forced to commit suicide because of poverty and hunger and on the other side super rich elite enjoys every luxury of life. The privatisation, liberalisation and structural adjustment programs on the behest of IMF and World bank took away whatever basic services were available to poor masses. The increased exploitation and repression at workplaces and lower wages have forced the working class people to live in poverty and misery.
Pakistani state failed to protect the interests of the toiling masses and poor. But on the contrary it helps ruling elite and rich to super exploit the working masses. The elite in this country enrich itself on the expense of working masses. There will be no relief for the masses until the free market economic policies are reversed. To improve the lives of millions of working people and poor, the system needs radical changes. Without the radical changes in the economic policies, the working masses will continue to suffer.
Now the question is whether this inequality in the salaries justified?
Does the gap between salaries reflect the personal capabilities, talent and performance of individuals? Is this difference natural or created through a certain system? The answer is simple no. It is not necessary that a top executive always more talented and innovative than his junior. The wages are not always decided on the basis of talent, capability, ability and knowledge.
It is justified if a doctor or engineer or iT specialist demands more money as wages than paramedics or technician but the gap should not be more than 1 to 5 or 6. On the basis of certain qualification or speciality one should get more compare to unskilled or semi skilled person. But the inequality should not be 1 to 50 or 500 or even 1000. The gap and difference is men made. The ruling class which owns the means of production and wealth created in the society decides who will get what.
The minimum wage is decided by the ruling class and so the salaries of CEOs and other senior officials. When the government fix the minimum wage why the government never decide the maximum wage for senior state officials, technocrats or CEOs. The reason is simple, the minimum wage is fixed for working class people on the basis that what they need to just survive. But the salaries of CEOs and top officials decides on the basis that what they need to live comfortable and luxurious life. The overwhelming majority of top level officials both in private sector and public belongs to ruling class or middle class. So all such decisions are taken on the basis of class interests.