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Farmers, teachers see real wages decline this year

Adjusted for inflation, the real wages of the services and industrial sector have grown substantially this year while real wages in the agriculture sector declined along with public sector wages, with real wages of teachers seeing the biggest dip, the Central Bank said.
The wages of public sector employees increased by 6.7 percent in nominal terms during the first eight months of 2011 as compared to the corresponding period of 2010 while wages of the formal private sector, increased by 4.4 per cent in the first half of 2011 in nominal terms.

Adjusted for inflation, real wages of the public sector records a 0.7 percent decline from a year earlier.

“Real wages of public sector employees decreased marginally by 0.7 percent, during the first eight months of 2011, since nominal wage increases were more than offset by the increase in the price level. Category-wise, real wages of non-executive officers and minor employees decreased by 0.8 percent and 0.6 percent, respectively, while real wages of government school teachers declined by 4.1 percent, during the first eight months of 2011,” the Central Bank said.

In the private sector, the minimum wage rate index of the employees in the industry and commerce sector and the services sector increased in nominal terms by 16.9 percent and 19.8 percent respectively, while that of the agriculture sector increased marginally by 0.5 per cent, during the period under review, the bank showed.

“When minimum wage rates are adjusted for inflation, real wages of workers in the industry and commerce, and the services sectors increased, while that of workers in the agriculture sector declined in the first half of 2011 when compared to the first half of 2010.”

“Real wage increases accruing to employees in the industry and commerce, and the services sectors were substantial at 8.5 percent and 11.2 percent, respectively, in the first half of the year when compared to the first half of the previous year, while the real wages in the agriculture sector declined by 6.7 percent. As a consequence of these changes, the overall real wage rate index for private sector employees declined by 3.1 per cent,” the bank said.

“The information on the daily wages, collected on major economic activities revealed that the informal private sector wages in the Agriculture and the Construction sectors increased by 8.3 per cent and 9.9 per cent, respectively, during the first eight months of 2011 over the same period of 2010. The average daily wages in the Tea, Coconut, Rubber and Paddy sub sectors increased by 11.1 per cent, 9.1 per cent, 8.3 per cent and 7.0 per cent, respectively, in the first eight months of 2011 compared to the corresponding period of the previous year.

Meanwhile, the average daily wage of carpenters and masons in the Construction sector also recorded increases of 10.2 per cent and 9.6 per cent, respectively, compared to the corresponding period of the previous year.

An increase in the real wages of employees in the informal Tea, Coconut and Rubber sub sectors was observed in the first eight months of 2011. Wages increased by 3.3 per cent, 1.5 per cent and 0.7 per cent, respectively, in these three sub sectors. However, real wages in the sub sector of Paddy decreased by 0.5 per cent. Meanwhile, wages for carpenters and masons in the Construction sector recorded modest increases of 2.6 per cent and 2.0 per cent, respectively, in real terms,” the Central Bank said.
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