Real Wages Grow at record levels for formal private-sector employees with the minimum wage increase and state-backed plantation sector wage hike
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The real wages of formal private-sector workers has grown by 58.6% during the first eight months of this year (2021) ended August, while real wages of the informal private-sector workers only increased marginally
by 0.4% and public sector, employees experienced a real wage erosion
of 5.2% in the period.
According to the Central Bank of Sri Lanka (CBSL), the large increase in wages in formal private-sector employees, whose wages are governed by wage boards, was mainly attributed to the increase in the daily wage of tea and rubber plantation workers to Rs. 1,000 w.e.f. 05 March 2021 and increase of minimum monthly salary of the private sector employees from
Rs. 10,000 to Rs. 12,500 and the minimum daily wage from Rs. 400 to Rs. 500.
The real wages of employees in the formal private sector declined by 4.4 percent in the same period of 2020.
However, the real wages of the informal private sector increased marginally by only 0.4% during the eight months ending August 2021 compared to the same period of 2020 when their real wages experienced a 2.8% decline.
In terms of the sub-activities of the informal sector, workers in the agriculture sector saw the slowest rate of wage increase followed by industry and services.
The public sector employees who saw their real wages rising last year despite the pandemic experienced a real wage erosion of 5.2% during the same period compared to the corresponding period of 2020, as their salaries remain static while inflation rose.
The Public Sector Employees saw their real wages rising by 4.3% experienced a real wage erosion of 5.2% during the same period compared to the corresponding period of 2020.
During this year, Headline inflation remained elevated, with food inflation remaining mostly at double-digit levels.
The NCPI inflation that stood at 3.7% in January, increased to 6.8% in July, and reversed its trend, and declined to 6.2% by September 2021. NCPI based food and non-food inflation has increased so far in 2021, while food inflation accelerated from 5.9% in January to 10.0% in September 2021
