Real wages nosedive

The daily wages for the construction sector may well have grown the most in ten quarters at 10 percent during 1QFY23 – it still makes the daily bread earners the worst off for any quarterly period in well over a decade. As inflation has stayed north of 26 percent for Jul-Aug FY23 and little respite on offer for September – the construction sector daily wagers face a real wage growth of negative 15 percent for 1QFY23. By far the highest ever.

Times have been tough for quite some time, as Covid slowed the wage growth, keeping it under 5 percent for four quarters. An uptick in wage growth in line with national CPI was on the cards, as energy prices have inflated prices across all categories. The Sensitive Price Index (SPI) which to some, more accurately reflects the state of affairs for daily wage earners such as painters, plumbers, electricians and masons – shattered all records earlier this month, closing in on 45 percent.

Food prices have of late shot up drastically, with millions possibly finding it extremely difficult to arrange two meals a day, let alone three. Ever since the current government took over in April 2022, construction sector wages, as tracked by the PBS, have gone up by 6.96 percent. A cup of tea, a plate of cooked lentils and flour to have some bread – have gone considerably dearer over the period – with the staple wheat four, taking the cake, at 36 percent increase in five months.

Bulk of the increase in wheat flour came last week as national average prices jumped 32 percent over the previous week – an unprecedented occurrence. With commercial gas prices slated to go further up in a month or two, expect Naan to go further up – having already witnessed a sharp increase in the recent past.

The extent of flood related damages on the livestock remains guesswork at best – dairy product prices have of late witnessed increase. A cup of tea, often the only source of sweet intake for the labor class, keeps getting expensive every week – having increased 16 percent in five months – the sharpest such increase in any five-month period.

With the change of guards at the Finance Ministry, it remains to be seen if shielding the underprivileged from crude price shocks becomes a priority in the election year. The need to protect the marginalized from sharp price increase in food prices was never greater. However politically motivated it may sound, the authorities must sit down and chalk a plan to shield the poor.