Official data show that while wages in the informal sector have begun to rise in rupee terms, they will still be unable to keep pace with rising prices, with real wages falling after inflation by June 2022.
In the agricultural sector, nominal wages increased by 28% in the year to June 2022, but real wages fell by 11%.
The National Consumer Price Index, on which the wage index is based, increased by 58.9 percent after the rupee fell precipitously in 2022 after two years of money printing.
Agriculture is one of the sectors where prices respond most quickly to money printing, initially increasing farmer income. Food prices have risen by around 90% in the year to August.
Wages in the informal sector are up 26%, but real wages are down 20% as of June.
Wages in the informal services sector increased by 30% year on year but fell by 17.9% after inflation.
There was no data on the formal sector, but public sector wages were down 26.9 percent by June after being raised in January. Real wages in the public sector have risen in recent years.
Some export firms had also begun giving workers allowances as prices rose following the rupee’s collapse, allowing the firm to earn more rupees.
When economists deliberately depreciate currencies by printing money, wages catch up with a lag, providing temporary profits to export and other firms.
However, formal sector wages do not immediately catch up, resulting in strikes and social unrest as economists expropriate wages from salaried workers’ pockets through monetary interventionism.
Inflationist-devaluationism became part of the official policy peddled by Washington-based Mercantilists (abbreviated BBC or basket, band, crawl) to third-world countries experiencing monetary and political instability.
All stable, high-performing East Asian nations opposed currency depreciation, but Indonesia tolerated it to some extent, eventually exporting labour to monetary-stable neighbors.
Bank Negara Indonesia was established during a post-World War II frenzy of interventionism and interest rate suppression, and it incorporated some of the provisions found in the central banks of Sri Lanka and Indonesia, such as provisional advances.