Bangladesh's high inflation has eroded away at wages of daily labourers amid volatile consumer price index (CPI) over the last few months.
The daily living cost of the low-income segment has been battered by an obstructed growth in the wage rate index (WRI) compared to the higher inflation rate, experts said.
Higher inflation against the lower WRI would severely affect employment, production and consumption, and many people would slip down below the poverty line, they added.
The Bangladesh Bureau of Statistics (BBS) data showed that the country's WRI was 7.52% in July.
On the other hand, the point-to-point inflation rate in the same month was 9.69%.
Over the last few months, the gap between the WRI and inflation has been becoming wider, thereby eating into the real wages of labourers.
The BBS counts the WRI through calculating the wages of 145 types of low-income labourers.
The country's inflation suddenly jumped onto "7% trajectory" in May 2022, which widened further the gap with the WRI.
The inflation rate entered into a "9% trajectory" in August 2022 that dropped down to "8% trajectory" in the later part of the same year.
But it rose in March 2023 and again entered into a "9% trajectory", as the CPI has been maintaining a higher trend over the last few months, the BBS data showed.
Meanwhile, the increase in month-on-month inflation rate over the last one year was much higher compared to that of the WRI, which widened the gap between expenditure and income of people.
According to the BBS, the gap between the WRI and the inflation rates was very thin before May 2022.
The WRI in April 2022 was recorded at 6.28%, and the inflation rate was almost the same at 6.29%.
In March 2022, the WRI was 6.15% while the inflation was 6.22%, and in February 2022 the WRI was 6.03% while the inflation was 6.17%, according to the BBS.
However, the WRI in May 2022 was recorded at 6.38% while the point-to-point inflation swelled to 7.42%.
In June 2022, the wage index increased to 6.47% while inflation reached 7.56%.
The inflation in March 2023 rose to 9.33% while the WRI was at 7.18% like a year ago, as per the BBS data.
Nearly 87% people of Bangladesh work in informal sectors, and most of them are daily wage earners.
The WRI is an important indicator for measuring the trend and changes in aggregate wages of the wage earners.
It is intended to measure the movement of nominal wages of the low-paid skilled and unskilled labourers over time in different sectors of the economy.
It is also used to measure changes in real wages relative to prices of goods they buy.
