Growth in monthly wages still below inflation

Monthly wage growth for workers in Bangladesh has remained below the inflation rate for 15 months consecutively, suggesting that many people are having to reduce consumption to cope with increased financial stress.

In April, wages of low paid skilled and unskilled workers grew 7.23 per cent, which was 2.01 percentage points below the inflation rate of 9.24 per cent that month, shows the Wage Rate Index (WRI) of the Bangladesh Bureau of Statistics.

The case was similar in March, when the wages of those workers grew 7.18 per cent, which was 2.15 percentage points below the inflation rate of 9.33 per cent that month.

The average monthly wage rate of low paid skilled and unskilled labourers is estimated from the pay scale of 44 occupations, including 11 in the agriculture sector, 22 in the industry sector and 11 in the service sector.

Last month, the wages of workers in agriculture grew by 7.28 per cent while it was 6.93 per cent and 7.6 per cent respectively for those in the industry and service sectors.

"This indicates that there are depletions in their real income," said Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue.

As a result, the purchasing capacity of low paid skilled and unskilled workers is falling and so, they are compromising on food and non-food expenditures, he added.

In late March, the South Asian Network on Economic Modeling (Sanem) published a survey that was conducted on lower-income groups with a sample of 1,600 households across eight divisions, where they found more than 96 per cent of the people reduced their meat consumption in the last six months.

It said 88.22 per cent of respondents have lessened their fish consumption while 77.06 per cent and 81.43 per cent have cut their egg and oil consumption respectively to cope with higher inflation.

The poorer households have also reduced their consumption of staple foods such as rice and wheat by 37.08 per cent and 56.55 per cent respectively, Sanem found.