The Pakistan Institute of Development Economics (PIDE) has proposed increasing the national minimum wage to Rs45,000 in its recommendations for the upcoming fiscal year 2026-27.
The proposal comes amid continued inflation, rising household expenses, and growing concerns about the financial well-being of workers across the country. According to PIDE, a higher minimum wage could help improve living standards for low-income employees who continue to face economic challenges.
The think tank has suggested that the government move away from annual wage increases that are often announced without a clear formula. Instead, it recommends a rules-based system that adjusts wages according to economic indicators and changing market conditions.
Under the proposed framework, provincial governments would have the flexibility to make adjustments based on local economic realities. This approach would allow wages to better reflect differences in living costs and employment conditions across various regions of Pakistan.
PIDE believes that a structured and evidence-based wage policy would improve transparency and predictability. The organization argues that such a system would be more effective than periodic adjustments announced during the Salary Budget process.
The report also highlights concerns regarding enforcement. According to estimates, nearly 80 percent of Pakistan’s workforce is employed in the informal sector. Many of these workers do not receive the legally mandated minimum wage due to weak implementation and limited oversight.
Experts say stronger enforcement mechanisms are necessary to ensure that workers benefit from any increase in the minimum wage. Without proper monitoring, wage regulations may not reach a large segment of the labor force.
The proposed Salary Budget reforms are designed to balance worker protection with business sustainability. Policymakers believe that wage increases should support employees while also considering the operational challenges faced by employers.
Economic experts note that fair wages can contribute to higher productivity and improved workforce morale. At the same time, businesses require a stable policy environment to manage costs and remain competitive.
The recommendation comes as the government prepares the federal budget for FY2026-27. Discussions around wages, taxation, and social protection measures are expected to remain key topics in the budget debate.
If adopted, the proposal could mark a significant change in how minimum wages are determined in Pakistan. Supporters believe the Salary Budget recommendation would create a more transparent and reliable system while helping workers cope with rising living costs.
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The government has yet to announce its final decision on the proposed increase, but the recommendation is likely to be closely watched by workers, employers, and economic analysts in the coming weeks.
