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The ouster of Hafeez Shaikh was unofficially blamed at his failure to tame inflation. Not sure if he had much to do with inflation, but the Prime Minister is sure feeling the heat. You can read the pulse from the reduction in petroleum price letting go of the opportunity to gain on taxes, and a rather major announcement of restarting trade with India (expect backlash?).

So how bad is it really? Well, going by the overall inflation numbers, this is nowhere close to the worst Pakistan has had. But as people usually compare one tenure with the one that preceded, it is worth exploring if people are better or worse off in real terms. Here is an attempt to view it from a daily wage earner’s angle, as to how have the essential food prices moved in relation to the wages.

Note that this is in no way an attempt at dissecting the externalities involved in the price increase, or who has better handled the prices. This is just to portray if the daily wage earner in the first 32 months of the current government is better or worse off than the same period of the previous government, regardless of underlying factors driving these prices.

You could go on and add as many variables, but for simplicity, real wages of daily earners are plotted against the prices of wheat flour (aata), lentils (cooked daal), and tea (prepared chai). Daal, roti and chai are what the labour class consumes the most on a daily basis at least once a day, especially those at work.

The labor wages, as tabulated by the PBS on a weekly basis, have gone from a base of 100 in August 2018 to 120 by February 2021. The same in the PML’s first 32 months had gone up to 128, so there is a clear winner here. But it will matter in the context of prices of the aforementioned key food items, and here is where the labor class must clearly be struggling.

The wage increase in PTI’s tenure thus far is lower than the food price increase in all the three items. It was the exact opposite in the PML-N’s first 32 months, where the wage increase outpaced the increase in prices of food items. However crude that estimation may be, it is safe to say an average daily worker finds it considerably difficult to just afford a basic meal today, than he did in the same period of the previous government.

Granted, there have been measures to support the extremely poor segment at a large scale than ever before, but the prices in general have affected the lowest income quintile the hardest, especially as the earnings have not raised by as much. It may or not be entirely the PTI’s fault, but this should make them better address pricing decisions going forward, and this makes the case for targeted subsidies ever more compelling. Here is hoping the labor of the country find it easier than they have so far, in the next half of the government’s tenure.


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