Pakistan’s Institute of Development Economics (PIDE) has suggested increasing the national minimum wage to Rs 45,000 per month for the fiscal year 2026-27. This is a 12.5% rise from the current Rs 40,000. The recommendation comes in a new policy report that calls for a more scientific and rules-based way to set wages.
PIDE says the minimum wage is not just about workers’ pay. It affects family spending power, poverty reduction, informal jobs, local demand, productivity, and even social peace. With rising living costs, many low-income families are struggling to buy basic needs like food, rent, and medicine.
Inflation is a major reason for this proposal. Average inflation was 6.19% from July to April in FY2026, while year-on-year inflation hit 10.9% in April 2026. Food and energy prices have gone up, hurting poor households the most.
The current minimum wage of Rs 40,000 was set for the 2025-26 period in most provinces. However, many experts and labor groups argue it is not enough for a decent life. PIDE used official data from the Pakistan Bureau of Statistics to calculate the new figure.
If accepted, this change could help millions of workers in factories, shops, and farms. The government will review the proposal while preparing the next budget. Higher wages may increase business costs, but supporters believe it will boost the economy by raising spending.
