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It may have gone behind the scenes now, but one must not forget inflation was at the heart of the movement against the now gone PTI government. The discourse has moved on to bigger matters, but it does not necessarily ease the pain for the daily wagers. National inflation over the past three and a half years is enough evidence that the populace has had it tough for most part.

Have the wages kept pace with price increase? Not quite. Especially for the daily wagers, mostly in the construction industry. Here is an attempt at tracking wage rate growth of plumbers, electricians, masons, painters, and laborers as tracked by the PBS. The labor wages, as tabulated by the PBS on a weekly basis, have gone from a base of 100 in August 2018 to 129 by March 2022. The same in the PML’s first 44 months had gone up to 132.

Contrary to perception, there is not much to choose from between the two tenures, as far as wages go. The PTI undoubtedly had it rough for most part, especially when caught in the pandemic and its aftermath. The curve seems to have caught up with PML-N’s much faster in the last six months, narrowing the gap. In other words, the wage growth has not necessarily been awfully off the track, at the end of PTI’s tenure at the office.

But that is only half the picture. What completes it is the growth in prices of essentials in the same time period. On a broader level, the real wages have stayed in the negative zone for the entirety of PTI’s tenure. The same stayed largely in the positive zone for almost the entirety of PML-N’s previous tenure, with the exception of FY17.

This is by no means an attempt at who handled the prices better, as there were externalities involved for the most part in the PTI’s tenure, such as Covid induced sluggishness, and then the global commodity price spiral in the wake of Russia-Ukraine tensions. But that does not mask the fact that the daily wagers had it rougher in the last 3.5 years than they did in the same period during the PML-N’s government.

To keep it simple, the wages have been plotted against the prices of wheat flour, prepared tea, and lentils (Roti, daal, and chai), under the assumption that an average daily wage laborer does end up having these items more frequently, while at work. While there is not a big difference in terms of wage growth at the end of 44 months, prices of essentials have certainly skyrocketed in PTI’s tenure.

For context, prices of all the three aforementioned food items have comfortably outpaced wage growth. The wages have grown from a base of 100 to 129 at the end of 44 months of PTI’s tenure, whereas prices of flour, lentils and tea, have grown to 151 on combined average basis. In contrast, prices had only gone up to 125 at the end of 44 months of PML-N’s tenure, whereas the wages went up to 132.

One must notlose sight of the fact that past three years have resulted in higher subsidies to the underprivileged (both targeted and otherwise). Controlling prices is not always advisable or practical, but the word on the street against soaring prices moves faster than many imagine. About time, Pakistan seriously starts expanding its tax base to be able to afford more targeted food subsidies to the lowest income quintile. Failure to do so will keep leading to political instability every few years.


Comments are closed.

Irfan Abdullah Apr 06, 2022 09:56am
During the quota system days, the export quota growth was allocated based on volume (quantity) growth in exports by the exporters. This resulted in exports of very low value addition garments, and even dumping of garments to avail the growth quota. It was later amended to be based on average value of exports as compared to national average so that exporters go for higher value addition. Learning from that experience, we need to index the average value of exports, either national average or international, etc. and compare the exporters value against it, in order to capture the inflationary impact on prices but still incentive better value addition instead of volume only, as it will have the same effect as in the past.
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