How to tackle high cost of living? Go for 49pc raise in monthly minimum wage
Business
Turkiye saw its annual inflation rate edge up to 61.98pc in November
LAHORE/ANKARA (Web Desk) – The easiest way to help the people crushed by the rising costs of living is to raise income through wage hikes, but no one is thinking about the possibility in Pakistan where the announcements about raising minimum wages in most cases remain on papers only, as the government either lacks will or resources to implement its own orders.
Amid a rising inflation and shrinking purchasing power, stagnant wages mean the situation is worsening for the overwhelming majority of Pakistanis with each passing day.
Wage hikes mean enhanced purchasing power which not only improve any individual’s conditions but also increase household spending which gives impetus to economy by boosting domestic demand – a much needed scenario for businesses and industries in Pakistan after being crippled by high interest rates.
Read more: Domestic demand, household spending forbidden topics in Pakistan?
There are countries, however, that are taking practical steps. Turkiye, formerly known as Turkey, is an example, where the people are battling record-high inflation and interest rate hikes.
Reuters in a report said that Turkiye's monthly minimum wage will be 17,002 Turkish lira ($578.31) in 2024, Labour Minister Vedat Isikhan said on Wednesday, marking a 49 per cent increase from the level determined in July and a 100pc hike from January.
Turkiye's annual inflation rate edged up to 61.98pc in November, its highest level this year but just shy of expectations, signalling that an aggressive rate-hiking cycle may be beginning to cool demand.
Inflation soared after a currency crisis [devaluation] at the end of 2021 and touched a 24-year peak of 85.51pc in October last year. This year, the lira has so far lost some 35pc of its value, compounding the cost-of-living crisis for Turks.
THE THAI PROMISE
Similarly, Thailand will increase its minimum wage in January, the government said on Tuesday, confirming a previous deal while planning to raise it further in March.
A wage committee, comprised of government, employers and employee representatives, had previously agreed to increase the daily minimum wage by 2.37pc, effective in January, but Prime Minister Srettha Thavisin deemed the hike too low.
Srettha said the committee would meet in January to seek a further wage hike to be announced in March. "There is no need to raise wages once a year," he told reporters.
THE SPANISH FORMULA
And in Spain, the government has extended a raft of measures designed to help people cope with high costs of living into 2024, even as the rate of inflation slows.
Accordingly, pensions will be raised by 3.8pc in 2024 to match average inflation over the past year, while broadening of subsidies for minors and young people on public transport to all regular users and an extension of the reduction of VAT for essential items such as fruit and vegetables, pasta and cooking oils are also among the government measures.
