Raising of Minimum Wage is a Deceitful Patchwork Solution
Inflation has risen to inconceivable rates in countries like Venezuela it is at 284.4%, Sudan at 259.80%, Lebanon at 208.13%, Syria at 139.46%, Zimbabwe at 96.4%, Turkey at 69.97%, Suriname at 61.5% and Argentina at 55.1%. (Trading Economics, Thursday, May 5, 2022). The countries mentioned are just some examples to paint the deplorable reality of nations across the world. Hence, the cost of living keeps rising as a result of deliberate instigation of inflation. So, most of the countries are facing insecurity and instability across the world including America, where inflation is at 8.5% the highest rate in 40 years. (Bureau of Labor Statistics, 12/04/2022).
Indeed, it is deliberately instigated by those in power in democratic regimes across the world led by America and its allies. For instance, after the 2nd World War in 1945, America emerged stronger and the dominant player who outpaced the former superpowers i.e. Britain, France and Germany. The former superpowers suffered heavily economically due to the war and so their global bargaining power shrunk. America took advantage of her immense authority buttressed by her economic strength and came up with a deceitful global monetary policy of converting other nations’ currencies to US Dollar and in turn the US Dollar was fixed to the gold at $35 an ounce or 28.3495 grams. In 1958 the policy became officially operational under the banner of the Bretton Woods system.
America enjoyed a trade surplus that guaranteed it a financial chest that it exploited to bail out her allies the ‘former superpowers’ from their economic ruin. Furthermore, it was able to maintain its gold reserves and control its debts. Hence, it moved ahead a guarantor of peace across the world. Buoyed by its new global status that was unrivaled by none, it went ahead and launched foreign wars and political maneuvers to counter her allies in their respective colonies.
In 1960s some of the nations that suffered economic ruin as a result of the World War II recovered and roared back into the global stage albeit under America’s watchful eyes. On the other hand, America was running a trade deficit and was suffering financial due to the surge in public spending and money supply. The Vietnam War broke America’s back causing her gold reserves to deplete to an extent it was unable to meet demand for exchange of US dollars for gold.
In 1971 America officially declared the end of the dollar to gold convertibility and set the stage for formally halting the fixed-exchange rate system in 1973. However, the exchange of other nations’ currency was pegged on the US dollar that was fixed to nothing but the hope in America’s dominance! Subsequently, the gates of instigated-inflation were official declared open since that moment to date. As the value of the American dollar keeps dropping at alarming levels, so is in other countries that shackled their currency to the US dollar.
Crises are synonymous with inflation. The Covid-19 plandemic and the Russia-Ukraine conflict is already threatening nations across the world as a result of plummeting local currencies that are unable to withstand the pressure to import goods and meet foreign financial obligations such as payment of loans. Thus, forcing the democratic regimes to pacify the masses with the ‘raising of the minimum wage.’ They allege that raising of the minimum wage will cushion ‘workers’ from the fire of inflation! Alas! It is just a buffoonery tactic to dissuade the ideologically blind masses! Then the same regime moves ahead and raise taxes on the goods! A good example is the Kenyan regime that has proposed taxes on the basic goods that initial was untaxed, then on Sunday, May 1, 2022 the same regime declared a 12% increase in minimum wage!
Indeed, such political maneuvers are the hallmark of all capitalist democratic regimes across the world. They allege to care for the citizens, but in reality they exist to protect a coterie of secular capitalists who possess all the wealth at the expense of the entire world population. That is the reason why most of the workers’ unions leadership is subservient to the capitalists’ barons! Workers’ unions act as conduits in controlling the workers’ sentiments. Henceforth, the raising of the minimum wage is just a political policy with no tangible results. Instead the economic nooses keep tightening across the world irrespective of either one is a worker or not. Secular capitalists continue to monopolise wealth and the government exist to protect them at whatever costs. So, the raising of the minimum wage is a deceitful patchwork solution.
In Islam, there is no issue of the ‘minimum wage.’ In other words, it is not anticipated to have industrial protests by workers as a result of inflation. Due to the fact that Islam is not a man-made ideology like that of the secular capitalist ideology. Instead, Islam is an ideology that emanates from the Creator, Allah (swt). Islam as an ideology has comprehensive systems that tackle each and every problem faced by human beings. Amongst the systems is the governance system of the Islamic State of Khilafah (Caliphate), Social System, Educational System, Economic System and Judicial System.
On the issue of minimum wage. Islam prioritizes the contract between an employer and an employee, because it permits an individual to either be an employer or employee (worker). Allah (swt) said: “أَهُمۡ يَقۡسِمُونَ رَحۡمَتَ رَبِّكَۚ نَحۡنُ قَسَمۡنَا بَيۡنَہُم مَّعِيشَتَہُمۡ فِى ٱلۡحَيَوٰةِ ٱلدُّنۡيَاۚ وَرَفَعۡنَا بَعۡضَہُمۡ فَوۡقَ بَعۡضٍ۬ دَرَجَـٰتٍ۬ لِّيَتَّخِذَ بَعۡضُہُم بَعۡضً۬ا سُخۡرِيًّ۬اۗ وَرَحۡمَتُ رَبِّكَ خَيۡرٌ۬ مِّمَّا يَجۡمَعُونَ” “It is We who portion out between them their livelihood in this world, and We raised some of them above others in ranks so that some may employ others in their work…” [43. Az-Zukhruf: 32] In addition, Bukhari narrated from Abu Hurairah (ra) that Rasulullah (saw) said:
»قَالَ اللَّهُ تَعَالَى ثَلاَثَةٌ أَنَا خَصْمُهُمْ يَوْمَ الْقِيَامَةِ رَجُلٌ أَعْطَى بِي ثُمَّ غَدَرَ، وَرَجُلٌ بَاعَ حُرًّا فَأَكَلَ ثَمَنَهُ، وَرَجُلٌ اسْتَأْجَرَ أَجِيرًا فَاسْتَوْفَى مِنْهُ وَلَمْ يُعْطِهِ أَجْرَهُ« ”.
“Allah said, ‘I will be an opponent to three types of people on the Day of Resurrection: -1. One who makes a covenant in My Name, but proves treacherous; -2. One who sells a free person and eats his price; and -3. One who employs a laborer and takes full work from him but does not pay him for his labour.’”
Based on the above it is clear that hiring is delivering a benefit by the hired person to the employer and delivering property from the employer to the employed. It is thus described as a contract to provide a benefit in return for recompense. The contract of hiring a worker is either based on the benefit of the work carried out by the worker or on the benefit of the worker himself. If the contract is based on the benefit of the work, then the contracted matter is the benefit produced by the work. Example of such a contract is hiring of a black smith, carpenter etc. However, if the contract is based on the benefit of the person himself, then the contracted matter is the benefit of the person. Example of such a contract is hiring of a farmer, factory worker, government employee, house help etc. [The Economic System of Islam (Hizb ut Tahrir’s book, English copy), pg. 84 – 86].
Consequently, hiring involves utilising the benefit of the hired thing. With regard to the worker, hiring is utilising his effort. It is necessary in hiring a worker, to define the work, the period of work, the wage and the effort. The work has to be defined so as not to become unknown, because hiring based on unknown work is invalid (Fasid). It is also necessary to define the period of work, such as daily, monthly or yearly. Similarly, the wage of the worker has to be defined. Ibn Mas’oud said that the Prophet (saw) said:
»إذا أجره فليعلمه ًأجيرا أحدكم استأجر«
“If any one of you employed a worker then he has to inform him of his wage”, as reported in Kanz al Ummal by al-Daraqutni. Moreover, Allah(swt) said: “لَا يُكَلِّفُ ٱللَّهُ نَفۡسًا إِلَّا وُسۡعَهَاۚ” “Allah burdens not a person beyond his scope.” [2. Al-Baqarah: 286] Bukhari and Muslim narrated from Abu Hurairah that the Prophet (saw) said: «إِذَا أَمَرْتُكُمْ بِشَىْءٍ فَخُذُوا مِنْهُ مَا اسْتَطَعْتُمْ» “If I commanded you to do something, then do as much of it as you can.” [The Economic System of Islam (Hizb ut Tahrir’s book, English copy), pg. 87]
It is imperative to recognize that Islam puts emphasis on the contract and not on the issue of the minimum wage. In case of any conflicts between the contracting parties, then the Khalifah (Caliph) will address the issues emerging out of the said contract. In case of any negligence on the part of the Khalifah, then one of the contracting parties will approach the Mahkamatul Madhalim (Court of Unjust Acts) for redress. So, industrial protests will not be there because there will be avenues to address any shortfalls within the contracting parties. Since working is an act of Ibadah (worship) then nothing will be entertained as long as it goes against the Islamic dictates.
In Islam the hiring contract prioritizes four factors: 1-type of work, 2-duration of work, 3-expected effort and 4-wage. High cost of living or inflation is not considered as part of the contract. However, the contract can be terminated by the employer if he cannot meet some of the factors, for instance the wage. Employee can terminate the contract and negotiate a new contract with his employer or seek employment somewhere else if for instance he feels the wage that he gets does not cater for his needs. But, it is haram to start violence, create chaos or steal the employer’s property in the name of seeking an increment in the minimum wage.
In the Khilafah government all citizens will be treated equal before the Islamic Shari’ah irrespective of either they are working or not. The Islamic government will strive to provide the basic needs to the citizens i.e. food, clothing and shelter; and also social needs i.e. healthcare, education and security. All citizens will enjoy the basic and social needs irrespective of their religion, status (poor or rich) or tribe. The Khalifah, ruler and the subjects are treated equal before the Islamic Shari’ah and there is NO immunity of office as stated in the capitalist ideology, where rulers are on their valley and the ruled on another!
On the issue of inflation, the Khilafah government established on the method of Prophethood will use gold and silver as its currency. This will cushion it from global financial manipulation perpetuated by the secular capitalist regimes. Thus providing domestic stability and tackle the issue of inflation once and for all. On the other hand, it will implement a policy of self-sufficient and exporting surplus in exchange for gold and silver for those interested to do business with the Khilafah amongst countries that it is not at war with. In addition, citizens will not be robbed of their wealth through questionable and oppressive taxations as witnessed in this secular capitalist regimes.
In conclusion, the minimum wage and inflation are deliberately orchestrated with each serving as a political plot by those in power or seeking to ascend to power. Power hungry secular leaders can instigate industrial protests in order to topple the ruling elites. On the other hand, those in power can engage in public relations exercise to endear themselves to the political, socio-economic blind masses or save their faces when faced with a looming crisis by attempting to raise the minimum wage then rob the same via taxation! The only radical solution to all problems faced by man is to #ReturnTheKhilafah.
Ali Nassoro Ali
Member of the Central Media Office of Hizb ut Tahrir