Dhaka Thursday, November 21, 2024

Wages growth consistently stays below inflation
  • Desk Report
  • 2022-10-24 23:35:38

Growth of monthly wages of workers has consistently remained below the inflation rate, or spiral in the prices of goods and services, worsening conditions of their families.

Data released by the Bangladesh Bureau of Statistics (BBS) showed that wages of low and unskilled workers grew 6.86 per cent year-on-year in September this year when overall consumer prices rose 9.10 per cent.

Workers similarly saw a 6.8 per cent growth in their wages in August but they, along with people of all walks to life, had to pay 9.52 per cent higher prices to buy foods and non-food items in the same month from that a year ago.

"Wages are not growing in line with inflation. It means that real wage is falling," said Sayema Haque Bidisha, a professor of economics at the University of Dhaka.

September was the ninth straight month workers in 44 occupations in agriculture, industry and service have been witnessing lower growth in their wages than inflation, which measures changes in a basket commodities and services.

The BBS calculates the Wage Rate Index (WRI) to measure the movement of nominal wages of low paid skilled and unskilled labour over time in different sectors of the economy. It is also used to measure changes in real wages.

At present, the BBS calculates the WRI of 11 occupations from agriculture sector, 22 occupations from industry sector and 11 occupations from service sector.

The BBS said workers in services sector saw the highest growth in their wages in August and September followed by industry and agriculture.

However, fishermen continued to be worst sufferer of high consumer prices as their wage growth remained below 5 per cent in the last two months.

Construction workers are another group of victims. While inflation had been above 9 per cent in the last two months, they had to accept wage growth below 6 per cent.

Bidisha said wage index might not capture the actual scenario on the ground.

"We have a huge number of underemployed and unemployed people. We cannot fully understand the impact of price hikes on the poor and the poorest," she said.

She suggested that the government design its incentive packages for businesses in a way that forces them to adopt and follow labour-friendly policies.

Nazneen Ahmed, country economist at United Nations Development Programme, Bangladesh said food inflation was still high and high prices of food had hit financially insolvent people.

Under such circumstances, the government should continue and expand its sale of essential commodities at subsidised rates, she said.

 

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