Inflation hits hard, wages stay flat — it’s a crisis of fairness
The persistent gap between wage growth and inflation in Bangladesh is a pressing concern that demands immediate attention. In its Tuesday issue, this newspaper reported that for 39 consecutive months, the working class has faced a harsh reality: nominal wage increases have consistently lagged behind the rising cost of living, eroding real incomes and diminishing consumer purchasing power. The latest data from the Bangladesh Bureau of Statistics (BBS) paints a stark picture, with inflation reaching a 12-year high of 11.66 per cent in July 2024, while wage growth stagnated at a mere 7.93 per cent. This 3.73 percentage point gap is not just a statistic; it represents the daily struggles of millions of Bangladeshis.
The situation has only worsened in recent months. In the first quarter of the fiscal year 2024-25, inflation remained stubbornly high, averaging 10.49 per cent in August and 9.9 per cent in September, while wage growth hovered around 7.93 to 8.01 per cent. The second quarter saw inflation peak at 11.4 per cent in November, with wage growth barely improving to 8.1 per cent. Even as inflation eased slightly in the third quarter, it remained above 9 per cent for 26 consecutive months, further squeezing household budgets.
The implications of this economic strain are dire. A study by the Research and Policy Integration for Development (RAPID) revealed that prolonged inflation has pushed an additional 7.9 million people below the poverty line, bringing the total to 38.2 million. With 9.8 million more at risk of falling into poverty, the social fabric of our nation is under threat.
Moreover, the rising unemployment rate, now at 4.63 per cent, exacerbates the situation. The number of jobless individuals has surged to 2.73 million, highlighting the urgent need for economic stability and job creation.
Economists warn that sustainable wage growth will remain elusive without renewed investor confidence and a stable political environment. The BBS’s data, while crucial, must be scrutinised for accuracy, as concerns about manipulation under previous regimes persist.
The interim government must implement comprehensive policies that foster an investment-friendly climate and ensure equitable economic reforms. The working class deserves better, they deserve a fair wage that reflects the true cost of living. Only through decisive action can we hope to reverse the decline in real incomes and restore dignity to the lives of millions of Bangladeshis.