Dr. Ikramul Haq & Abdul Rauf Shakoori
The condition of labour in Pakistan remains among the most concerning in the region because the realities workers face each day reflect severe neglect and deep structural exploitation. Those serving at brick kilns, makeshift factories, small shops, private homes, and local businesses continue to work seven days a week with shifts extending beyond sixteen hours, yet they still fail to get the minimum wage fixed by the federal/provincial governments.
The situation is even more alarming in cases where all family members have to work together only to collectively earn what should legally be the minimum wage for one individual. The regulated private sector is not also not an exception where the standard eight-hour workday is rarely followed and employees are invariably pushed into long hours, unpaid overtime, and unsafe working conditions—a blatant violation of Article 11(2) of the Constitution forbidding forced labour.
The harsh treatment of workers stands in clear conflict with the basic standards set by the International Labour Organization (ILO), which expects every member state to protect workers’ rights, regulate working hours, enforce minimum wages, prevent forced labour, eliminate child labour, safeguard occupational safety and health, promote collective bargaining, and ensure equal opportunity for men and women.
The obligations under the ILO conventions require each government to establish enforcement mechanisms, update labour legislation, introduce grievance systems, and guarantee that employers comply with national and international protections. The failure to meet these expectations continues to push Pakistan down on global labour rights indices and international assessments frequently highlight the country’s weak enforcement, lack of monitoring, and limited protection for vulnerable workers.
The violation of labour rights directly fuels poverty because long hours with low wages reduce productivity, prevent social mobility, and trap families in cycles of deprivation. The adherence to labour laws can lift the living standards of millions because workers would receive fair compensation for the hours they spend at work, and many would have the opportunity to take on additional part time work instead of being tied to one employer for below minimum wage.
The compliance with legal working hours would also allow workers to use weekends to rest, support their families, or engage in income generating activities. The human and economic cost of ignoring these rights is severe and the urgency for reform becomes even more evident when viewed through the latest data released by the Pakistan Bureau of Statistics (PBS).
The PBS has recently released its Labour Force Survey for 2024 25 [“the Survey”] and the findings provide a detailed picture of the evolving labour market. The Survey aims to compile a wide set of labour indicators, and the data is intended to support informed decision making in areas such as skill development, employment generation, and workforce planning.
The Survey presents a combination of positive developments and serious concerns because the labour force is expanding and employment is increasing, yet the unemployment rate is also rising. The gender disparities remain stark because women continue to carry a disproportionate burden of unpaid domestic work and face higher unemployment levels across both rural and urban regions. The release marks the thirty seventh nationwide survey and the comparison with the 2020-21 results helps explain the changing economic environment.
The Labour Force Participation Rate has risen from 44.9 percent in 2020 21 to 47.7 percent in 2024 25 and the increase is visible across both men and women. The male participation rate grew from 67.9 percent to 69.8 percent, and the female participation rate rose from 21.4 percent to 24.4 percent.
The total labour force has expanded from 71.8 million to 85.6 million, which means that nearly 3.5 million individuals enter the labour market every year. The number of employed people increased to 79.7 million in 2024-25 from 67.3 million in 2020-21 and this reflects an average annual addition of about 3.1 million employed workers. The expansion is driven largely by growth in self-employment because many individuals are creating small scale opportunities due to the limited availability of formal jobs.
The distribution of employment across industries shows structural shifts. The share of workers in agriculture has declined from 37.4 percent to 35.1 percent and the manufacturing sector has experienced a slight reduction from 14.9 percent to 14.4 percent. The movement away from agriculture indicates a broader economic transition but it has not been matched by strong job creation in higher productivity sectors. The services sector continues to absorb most new entrants but many of these roles remain low wage informal positions with limited long-term security.
The dominance of informal employment remains the most defining feature of the labour market because 72.1 percent of nonagricultural workers operate in the informal sector. The share is even higher in rural regions, reaching 75.5 percent, while urban areas stand at 68.3 percent.
The slight improvement in formal employment, particularly in cities, is not enough to shift the overall imbalance. The consequence of this heavy reliance on informal work is that millions of workers remain without contracts, without access to social security, without health insurance, and without legal protection if they are mistreated or dismissed.
The rise in unemployment presents another challenge. The number of unemployed individuals increased from 4.5 million in 2020-21 to 5.9 million in 2024-25, which pushed the national unemployment rate from 6.3 percent to 6.9 percent. Unofficial estimates place it in double digit between 11 to 16 percent. A statement by veteran economist, Dr. Hafiz A Pasha, in July 2025 that unemployment rate reached 22 percent trigged a heated debate.
The gender differences as per the official Survey are disturbing, as female unemployment stands at 9.7 percent whereas male unemployment is 5.9 percent. The rural unemployment rate rose from 5.8 percent to 6.3 percent and the urban rate climbed from 7.3 percent to 8.0 percent.
The numbers for young people show an especially difficult situation because new entrants to the labour market struggle to secure stable and well-paid work.
The income side of the Survey shows nominal progress because average monthly wages rose from Rs. 24,028 to Rs. 39,042, but the sharp rise in inflation has reduced the real value of this increase. The purchasing power of the average worker remains extremely weak, and families continue to face financial pressure. The wage gap between men and women persists and the income of informal workers remains far below the national average.
The Survey also highlights the slow emergence of digital and gig work. The online or gig economy accounts for only 2.9 percent of total employment and most of these workers are men, with a participation rate of 3 percent. The potential for digital expansion exists but the barriers to entry remain high because of unequal access to technology, low digital literacy, and limited internet infrastructure in rural parts of the country.
The overall findings of the Survey emphasize the urgent need for policy reforms, structural improvements, and stronger enforcement mechanisms. The improvement of female workforce participation, the reduction of informal employment, and the diversification of the economy are essential steps. The enforcement of minimum wages, regulation of working hours, and expansion of social protection programs can strengthen the labour market and support millions of families. The alignment of national laws with international labour standards can improve Pakistan’s global standing and create a more humane and productive economy.
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Dr. Ikramul Haq, Advocate Supreme Court, specializes in constitutional, corporate, environment, media, ML/CFT related laws, IT and intellectual property laws, arbitration and international tax laws. He holds LLD in tax laws with specialization in transfer pricing. He was full-time journalist from 1979 to 1984 with Viewpoint and Dawn. He served Civil Services of Pakistan from 1984 to 1996.
He established Huzaima & Ikram in 1996 and is presently its chief partner. He studied journalism, English literature and law. He is Chief Editor of Taxation. He is country editor and correspondent of International Bureau of Fiscal Documentation (IBFD) and member of International Fiscal Association (IFA).
He is Visiting Faculty at Lahore University of Management Sciences (LUMS) and member Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE).
He has coauthored with Huzaima Bukhari many books that include, Tax Reforms in Pakistan: Historic & Critical Review, Towards Broad, Flat, Low-rate, and Predictable Taxes (third edition, 2024), Pakistan: Enigma of Taxation, Towards Flat, Low-rate, Broad and Predictable Taxes (revised/enlarged edition of December 2020), Law & Practice of Income Tax, Law , Practice of Sales Tax, Law and Practice of Corporate Law, Law & Practice of Federal Excise, Law & Practice of Sales Tax on Services, Federal Tax Laws of Pakistan, Provincial Tax Laws, Practical Handbook of Income Tax, Tax Laws of Pakistan, Principles of Income Tax with Glossary and Master Tax Guide, Income Tax Digest 1886-2011 (with judicial analysis).
He is author of Commentary on Avoidance of Double Taxation Agreements, Pakistan: From Hash to Heroin, its sequel Pakistan: Drug-trap to Debt-trap and Practical Handbook of Income Tax. Two books of poetry are Phull Kikkaran De (Punjabi 2023) and Nai Ufaq (Urdu 1979 with Siraj Munir and Shahid Jamal).
He regularly writes columns/article/papers for many Pakistani newspapers and international journals and has contributed over 3000 articles on a variety of issues of public interest, printed in various journals, magazines and newspapers at home and abroad.
X (formerly Twitter): DrIkramulHaq
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Abdul Rauf Shakoori, Advocate High Court, is a subject-matter expert on AML-CFT, Compliance, Cyber Crime and Risk Management. He has been providing AML-CFT advisory and training services to financial institutions (banks, DNFBPs, Investment companies, Money Service Businesses, insurance companies and securities), government institutions including law enforcement agencies located in North America (USA & CANADA), Middle East and Pakistan. His areas of expertise include legal, strategic planning, cross-border transactions including but not limited to joint ventures (JVs), mergers & acquisitions (M&A), takeovers, privatizations, overseas expansions, USA Patriot Act, Banking Secrecy Act, Office of Foreign Assets Control (OFAC).
Over his career he has demonstrated excellent leadership, communication, analytical, and problem-solving skills and have also developed and delivered training courses in the areas of AML/CFT, Compliance, Fraud & Financial Crime Risk Management, Bank Secrecy, Cyber Crimes & Internet Threats against Banks, E–Channels Fraud Prevention, Security and Investigation of Financial Crimes. The courses have been delivered as practical workshops with case study driven scenarios and exams to ensure knowledge transfer.
His notable publications are Rauf’s Compilation of Corporate Laws of Pakistan, Rauf’s Company Law and Practice of Pakistan and Rauf’s Research on Labour Laws and Income Tax and others.
His articles include: Revenue collection: Contemporary targets vs. orthodox approach, It is time to say goodbye to our past, US double standards, Was Due Process Flouted While Convicting Nawaz Sharif?, FATF and unjustly grey listed Pakistan, Corruption is no excuse for Incompetence, Next step for Pakistan, Pakistan’s compliance with FATF mandates, a work in progress, Pakistan’s strategy to address FATF Mandates was Inadequate, Pakistan’s Evolving FATF Compliance, Transparency Curtails Corruption, Pakistan’s Long Road towards FATF Compliance, Pakistan’s Archaic Approach to Addressing FATF Mandates, FATF: Challenges for June deadline, Pakistan: Combating the illicit flow of money, Regulating Crypto: An uphill task for Pakistan. Pakistan’s economy – Chicanery of numbers. Pakistan: Reclaiming its space on FATF whitelist. Sacred Games: Kulbhushan Jadhav Case. National FATF secretariat and Financial Monitoring Unit. The FATF challenge. Pakistan: Crucial FATF hearing. Pakistan: Dissecting FATF Failure, Environmental crimes: An emerging challenge, Countering corrupt practices .
X (formerly Twitter): Abdul Rauf Shakoori
The recent publication, coauthored by these writes with Huzaima Bukhari is:
Pakistan Tackling FATF: Challenges & Solutions, available at:
https://aacp.com.pk/book-detail/pakistan-tackling-fatf-challenges-and-solutions-35