The Planning Commission’s estimate puts poverty at 28.9 percent in 2024-2025, up from 21.9 percent in 2018-2019, based on the Household Integrated Economic Survey. The World Bank estimates this at about 70 million people. Pakistan’s national poverty measure compares household consumption with the cost of basic food and non-food needs. By this measure, rural poverty (36.2 percent) is more than double the urban rate (17.4 percent). Employment can provide a path out of poverty, depending on the pay and what the work enables people to do.
Pakistan’s Labour Force Survey 2024-2025 reports unemployment at 7.1 percent and underemployment at 1.6 percent. The Pakistan Bureau of Statistics defines underemployment as working fewer than 35 hours a week while seeking or available for additional work. Someone working full time below their qualifications is excluded from both figures, as is someone working long hours for low wages. Underused skills and inadequate pay are distinct problems that can limit opportunities and choices, including for people above the consumption poverty line.
It is a vicious cycle: income poverty limits choices; limited choices deepen income poverty. A family may have enough to eat yet lack the means to keep a daughter in college or to move closer to work. Without adequate education, she may be unable to reach her full potential. Likewise, a sudden rise in commuting costs may force the family to cut other essentials. If the breadwinner falls ill, another family member may have to take the first job available, with little room to negotiate wages. Inadequate earnings limit the household’s ability to finance further education or skill development, which in turn reduces their bargaining power for better job terms.
In earlier articles, I have examined why poverty reproduces itself and privilege endures. Employment connects the two. Higher-income families can pay for education employers value and support their children until they find suitable jobs. Poorer families may need a teenager’s wages immediately. Even when they keep children in school, they may struggle to afford comparable teaching and qualifications. A child who leaves school to support the household may end up in the same poorly paid occupations as their parents. Even with a degree, a child from this income stratum will have little negotiating power and is likely to be underemployed.
Women face additional restrictions. Those needing immediate income may accept low pay, unsafe work or poor commuting conditions. Across income groups, unpaid care limits the time women can devote to paid work. Family norms and unsafe working conditions further narrow their options. Qualifications cannot improve their limited choices if they cannot enter paid employment or keep what they earn.
Even families that sacrifice other needs to educate their children may find that only those who have personal connections get jobs. Poorer applicants lose access despite having the required skills. The economy also loses capable workers when connections outweigh competence.
These exclusions weaken growth. Because a sizeable segment of consumers has limited purchasing power, businesses do not invest in value-added goods and services. Poor nutrition and interrupted schooling reduce future earnings, leaving the next generation with fewer resources.
Higher-income families can pay for education employers value and support their children until they find suitable jobs. Poorer families may need a teenager’s wages immediately.
Access to better work also depends on who influences economic policy. Oxfam’s 2026 report, Resisting the Rule of the Rich, examines how concentrated wealth becomes political influence. UNDP has documented how privileged groups in Pakistan use networks and policies to protect their advantages. Tax concessions reduce funds for public services. Protection from competition can sustain higher prices and exclude new firms that might employ workers or offer goods and services at competitive prices.
Political brokerage reinforces these restrictions. A politician who arranges a job or grant can present a public benefit as a personal favour. Reliable public services reduce the citizens’ dependence on such intermediaries. Expanding access can therefore weaken the influence of those who benefit from deciding who receives assistance.
Bangladesh’s BRAC programme shows what happens when poor households can exercise choices. It provided very poor women with productive assets, training, coaching and temporary consumption support. A randomised evaluation found household earnings 21 percent higher after four years than in comparison communities. Women expanded livestock rearing and worked more regularly. The programme financed both the entry into a different occupation and the transition before it generated dependable earnings.
Agricultural and domestic-work wages also rose among women outside the programme, although their annual earnings did not increase significantly. However, as the BRAC recipients had changed their work, local employers had to show certain degree of flexibility to attract and retain new workers. This suggests that poverty reduction can improve bargaining power by giving workers alternatives.
To improve the bargaining power of rural workers, Pakistan’s livelihood programmes should connect the “golden triangle” of training, basic capital and access to markets. Training must develop skills that employers or buyers need. Capital must cover equipment and working expenses until earnings begin. Market access requires transport, information on demand and links with buyers. Producer groups can pool output and negotiate prices, reducing dependence on a single middleman.
The government can reduce poverty of opportunity through proactive, preventive policies. The BISP education stipends help children attend school, but the authorities should also ensure that they have functioning schools to attend. Provinces can link training to apprenticeships and fund childcare and safe transport. Labour and social protection departments must enforce minimum wages, ensure EOBI registration and formalise informal occupations such as waste collection. The government should also require online delivery and ride-service platforms to provide accident and life insurance for their delivery workers and ride providers. These measures give poorer households more options in how they earn a living.
Amartya Sen described poverty as “deprivation of basic capabilities,” in other words, restrictions on what people can actually do and be. Multidimensional poverty assessments can gauge some of the drivers of those restrictions by examining overlapping disadvantages in health, education and living standards. On the International Day for the Eradication of Poverty, our target should be to improve these conditions alongside earnings. Crossing a poverty line should leave people with more choices about how they live.
The writer heads the Sustainable Development Policy Institute and is a member of the Asian Development Bank Institute’s Advisory Board. His LinkedIn handle is Abidsuleri.
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