Wage growth drops further though economy reopens | The Daily Star
12:00 AM, August 27, 2020 / LAST MODIFIED: 01:20 AM, August 27, 2020

Wage growth drops further though economy reopens

Workers in the agriculture, industries and services sectors witnessed a further drop in wage growth in July as they were shut of income opportunities due to the economic headwinds brought about by the Covid-19 pandemic.

General wages grew 5.82 per cent in July, the lowest in recent months, as economic activities did not pick up as expected to create adequate job and income prospects although the government-announced holiday to contain the spread of the virus ended at the beginning of June.

Workers saw their wages grow 5.90 per cent in June, only one basis point higher than the previous month, according to Bangladesh Bureau of Statistics' Wage Rate Index (WRI), an indicator of trends in aggregate wages.

The WRI tracks the movement of nominal wages of low-paid skilled and unskilled labourers over time in different sectors of the economy, the BBS said. The index is also used to measure changes in real wages.

The agency estimated average monthly wage rate of low-paid skilled and unskilled labourers in 44 occupations -- 11 in agriculture, 22 in industries and 11 in the services sector.

The BBS said workers in the services sector were worst-hit in July followed by industrial and agricultural workers.

The services sector, which accounts for more than half the country's gross domestic product (GDP), represents people working in tens of thousands of retail stores, wholesale businesses, hotels and restaurants, transport, education and a host of other sectors.

In July, wage growth of workers in the services sector declined to 5.52 per cent from 5.78 per cent in June, only depicting that a large part of the economy is yet to return to normal from the havoc caused by the pandemic.

The BBS data also showed that the overall wellbeing of people working in the services sector eroded in July, as inflation, a measure of average changes in the prices of goods and services, was higher than their wage growth.

Inflation was 5.53 per cent in July and price spikes hit construction workers and fishermen hard as their wage growth was way below the rate of inflation. 

Growth of income of construction workers slowed to 4.12 per cent in July from 4.24 per cent in the previous month as builders and contractors were slowly resuming their activities.

For fishermen, wages grew 4.87 per cent in July, one basis point lower than that in the previous month.

However, income of workers in the manufacturing sector did not drop much compared to the construction workers and fishermen, according to the WRI.

The BBS said wages of manufacturing and farm labourers grew at a slower pace in July than in June but the rate of growth was higher than inflation.

Production workers' wage increased 7.09 per cent in July, down from 7.23 per cent a month ago.

In July, wage growth of farm workers slowed to 6.15 per cent from 6.18 per cent in June, showed BBS data.

The state agency paints the grim picture of wage growth at a time when independent research organisations estimate that the coronavirus-induced crisis pushed a large number of people into poverty.

A recently survey by the Power and Participation Research Centre and BRAC Institute for Governance and Development showed that income of the poor remained 42 per cent below the pre-pandemic levels although the economy reopened in June. And 17 per cent of the poor households were still out of work in June, it said. 

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