4. Pakistan

PAKISTAN

Chapter Highlights

• All workers experienced employment shocks either in the form of layoffs (86%) or terminations (14%).

• While workers reported an overall wage theft of 29% in 2020, overall exports in 2020 declined by just 2%, as compared to 2019.

• 81% of the workers were pushed below the international poverty line of the World Bank (measured at 3.2 USD PPP) between March and May, 2020.

• Workers with an average 5 years of work experience did not have enough savings to tide over even a one-month layoff period, without reducing consumption, incurring debt or selling assets.

Section 1: Introduction

Garment workers in Pakistan faced some of the highest levels of wage theft in the Asian garment industry during the Covid-19 crisis due to the imposition of provincial Covid-19 lockdowns that coincided with the cancellation of orders by many global brands sourcing from the country. Although the intensity of the crisis was felt most in April and May 2020, women workers, who are mostly employed in casual jobs, continued to bear the brunt of it even in early 2021 as most factories did not rehire women workers laid off in 2020.

The textile and garment industry in Pakistan, which is the second largest employer in Pakistan, accounts for around 8.5% of GDP and almost 70% of the country’s exports.1 Pakistan’s garment exports contribute to around 1-2% of the world market share and has recorded high rates of Compounded Annual Growth Rate in the value of garment exports over the past few years.2 Despite this growth, Pakistan’s garment workers are some of the worst paid in the world, with poor social security coverage and extremely low rates of unionisation.

In contrast to the global norm, the garment factory workforce in Pakistan is largely male-dominated, as women face significant restrictions to mobility due to cultural and social norms. Nevertheless, presence of women in the garment workforce has been increasing after the phase-out of the quota-based Multi Fibre Agreement (MFA) in 2005 as a result of various campaigns by development agencies.3 Accordingly, the garment industry is slowly emerging as an important driver of female workforce participation as brands and suppliers take advantage of the gender pay gap and lack of industrial work experience among women. However, cheap wages, lack of written contracts, exploitative working conditions, and labour rights violations remain a characteristic feature of the Pakistani garment industry, as indicated by multiple investigations conducted in the aftermath of the Ali Enterprises factory fire