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July 04, 2020

Making the case for inflation-adjusted salaries

The salaries of government employees were raised recently in a bid to meet the rising costs of living. However, raising salaries can actually have a negative impact on the market because it causes costs to spike further. It’s common knowledge that a few months after pay scales go up, the immediate benefits are wiped out by ever-increasing costs of living. Meanwhile government employees cannot enjoy the benefits of a raise and may even be negatively affected by the drawbacks that arise. It is clear that one of the main reasons for rising commodity prices is inflation, which is the greatest enemy of low-income earners such as low-level government employees. And although it’s not been long since the government upped the salaries of its employees, rising prices caused by inflation due to a strengthening US dollar and the calamity of the floods have cancelled out the pay rise. This is a scenario that has been playing out in Myanmar for decades, yet no one seems to have found a solution. It is therefore advisable that low level government employees should be given inflation-adjusted salaries rather than raising their salaries frequently and causing price volatility.


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