High inflation pushes many under poverty line

For the 10th consecutive month, the monthly wage growth of workers has remained below inflation, a trend that indicates a worsening poverty situation as many people are being compelled to cut consumption amid falling real income. In November this year, wages of low and unskilled workers grew 6.98 per cent, which was 1.87 percentage points below the average inflation rate of 8.85 per cent in the same month.

In October, wages of workers in 44 occupations in agriculture, industry and services grew 6.91 per cent against a consumer price hike of 8.91 per cent, clearly indicating a downward trend of real wages. To cope with inflation, people reduced their consumption and sacrificed nutrition and other discretionary expenditures. The poverty situation has been deteriorating and a large section of low and fixed-income people who were above the poverty level were at risk economically.

Besides, many lower-middle-income families also face a tough time. However, they are not getting policy attention in terms of their needs. It seems that the burden of resilience has wholly been put on the shoulders of people with low and fixed incomes and even on the middle class.

A vast majority is absent in the policy priority. It seems that survival is the job of this section of people. Earlier this month, the Food and Agriculture Organisation (FAO) in a report said Bangladesh was suffering from severe localised food insecurity owing to economic constraints, refugee influx, floods and high prices of imported food items.

Food insecurity, as well as poverty levels, has increased due to income losses caused by the effects of the Covid-19 pandemic. The real income of people is falling consistently as wage growth is remaining below inflation. It means that people can buy less, and many are forced to exhaust their savings and other options against the backdrop of high inflation. Under this circumstance, the government should expand coverage and allocation of social protection schemes to prevent them from falling into deeper impoverishment, establish governance and accountability in the economy and control the consumer market strictly.