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When the going gets tough, it gets tougher for some. The labor wages, primarily engaged in construction sector, as tracked by the PakistanBureau of Statistics (PBS) have continued to grow at snail’s pace. Wage growth in the last four quarters has been almost identical at around 7 percent year-on-year, whereas national inflation has continued to rise steadily. And mind you, this comes at the back of a sluggish previous four quarters during peak pandemic.

The Sensitive Price Index (SPI) could well be a better indicator of how well or worse off are the low-incomesegments. The SPI has seen a sharper increase of late, led primarily by food items. Food basket takes a large portion of monthly spending on the bottom two quintiles. The labor class in 4QFY22 saw its wages jump by 7 percent year-on-year, on an average, whereas CPI inflation is expected to end at 14 percent for the quarter.

The real wage growth at negative 7 percent for 4QFY22 is the highest since at least FY15. The 3-and-a-half-year period of the previous government was easily the toughest for the labor class in terms of real wage growth. The three months of the current setup are proving even harder. Commodity super cycle, currency depreciation are valid justifications, but surely the labor class living on daily wages could care less for the explanation.

The prices of food items used as a proxy to assess how difficult it has become for the daily wagers to afford one meal a day with a teacup, tell a harrowing tale. Flour prices have been steadily rising, and the recent round of inflation has led to a substantial increase in price of Naan which does not get recorded in the SPI. But anecdote suggests prices have gone up by a third in one go, in most cases in big cities at least.

A single serving of cooked lentils and a cup of tea have both seen the highest quarter-on-quarter increase since at least FY15. If the average labor wage was Rs100 in August 2018, it is only Rs132 nearly four years down the road. A cup of tea cost 173, whereas a serving of cooked lentils is up 60 percent. And to think that the second round of inflation may not even have come just yet, as fuel, power and gas are all set to get even more expensive, come July.

However strapped the fiscal space maybe, continuous efforts to shield the lowest income groups from the relentless onslaught of inflation via direct and targeted subsidies, must not stop. The more privileged class would do well to remind itself of showing some empathy to the less privileged, even though it is going to get tougher for everyone out there.

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SHAHO Jul 01, 2022 03:28pm
Where does 'A cup of tea cost 173'?
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