Must find ways to subsidise the poor

12 Oct, 2023

National headline inflation for the third straight quarter stayed close to 30 percent – a first in Pakistan’s recorded history. The last three quarters have unsurprisingly also been the three worst quarters in terms of real wage growth for construction sector. This is despite nominal wage growth in double-digits for three straight quarters. Such is the erosion in real wages, that it has outpaced nominal wage growth for five straight quarters.

For context, 15 percent growth in nominal wages was met with 35 percent headline inflation for 4QFY23 – returning real wage growth of negative 20 percent. This has happened every quarter since 1QFY23, with varying magnitude. And no, the deterioration in construction workers’ wages is not a recent phenomenon. 1QFY23 the 16th consecutive quarter of negative real wages when pinned against headline national inflation. Four years of being behind the eight ball – now that is some ordeal. And if one benchmarks it against food inflation only, or with that of bottom twoquintiles, or just the SPI – the picture would look scarier. Doing that makes more sense as the sector wages tracked by the PBS consists of masons, painters, electricians, carpenters, and plumbers.

The price of wheat flour has doubled in less than a year. The PBS does not publish the retail price for Naan, but that surely has also doubled in the same period. The working-classaverage meal price of Daal Roti has now doubled in less than three years – whereas it took six years for prices to double before this. A cup of tea has also become dearer – doubling in 35 months –having taken 75 months to double prior to this.

The price of a standard meal for a labor after a day’s work is up over 40 percent in less than a year. A plate of cooked daal with 2 naans and a cup of tea – takes away as much as 20 percent of an average laborer’sdaily earning. That is just one meal for an individual – and not taking into account for the fact that the working class typically have 3-4 mouths to feed. Forget thrice a day, just doing it once will take away half the daily earnings.

Leave the ever-rising transportation, electricity, and education costs for some other time. Goes without saying, the authorities must not turn away from the poor man’s plight and do whatever it takes to shelter them from what is becoming an unbearable situation. If it takes expanding the social safety net by whatever means, so be it. The working class is in need of help, and it should come sooner rather than later.

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