Minimum wage not enough to bear food cost

High inflation is directly threatening the food security of workers of at least 14 industrial sectors earning a minimum wage, said the Centre for Policy Dialogue (CPD) yesterday.

The independent think tank urged the authorities to "urgently" revisit and revise the minimum wages of workers in all industrial sectors.

The CPD put forth some estimates based on Bangladesh Urban Socioeconomic Assessment Survey 2019 conducted by the Bangladesh Bureau of Statistics.

The average monthly cost of a basket of 19 common food items, enabling a regular diet for a household of four persons in Dhaka city, was Tk 23,676 as of December 15 this year, it said.

If fish, mutton, beef or chicken was kept out, the cost will stand at Tk 9,557, it said.

Both cost estimates are 5 per cent higher than the CPD's previous food estimate of October this year.

The CPD named some sectors where wages being paid to workers and employees were lower than the compromised cost, even if a 5 per cent increment in wages was taken into account.

Source: CPD estimate

The sectors are namely garments, hotels and restaurants, fish and trawler, tailoring, bakery, biscuit and confectionery, automobile workshop, plastic, leather and footwear and rice mills.

Only workers and employees of shipbreaking, tannery, aluminium, rerolling mills, construction and timber were able to manage compromised diets, said the CPD.

The findings are revealed at a time when prices of a number of key commodities, namely rice, wheat flour and sugar, are being traded at record high prices as reflected in overall inflation, which remains elevated.

"Cost of essential commodities are going up hurting the low-income people," said CPD Executive Director Fahmida Khatun presenting a paper at a dialogue on the current economic crisis and ways out at BRAC Centre Inn.

Prices of rice, edible oil and sugar are above international prices as the market is not functioning properly, said the CPD.

"In the recent period, prices of a number of commodities have declined globally. We don't see its reflection in the local market," said Fahmida.

The think tank suggested that the National Board of Revenue consider withdrawing advance income tax (AIT), advance tax (AT) and regulatory duty (RD) on imported essential food items.

This will enable fixed and low-income people to buy food at lower prices, it said.

"The role of Bangladesh Competition Commission needs to be strengthened, particularly in the case of the essential consumer goods market," said the CPD.

The commission should develop a database and regularly monitor the dominant market players' operations to curb scopes of manipulation and skyrocketing of prices, it said.

The competition authority should adopt a strong stance against cartels and a zero-tolerance policy towards collusive practices, it said.

It suggested reviewing the competition to directly address monopolies and include specific anti-trust clauses along with concrete penalties for violators.

The CPD recommended that the private sector consider salary increments during times of high inflation so that workers do not have to compromise on their living standards.

"The volume of sale of essential commodities through the open market system should be increased," said Fahmida.

She also stressed on the effective distribution of the subsidised commodities without any corruption so that eligible people have access to those items at low prices.

"The government should provide direct cash support to the poor, enhance social protection for low-income families, and extend stimulus to the small businesses for their survival during difficult times," said Famida.