A rising cost of living and stagnant wages

Until wages begin to reflect the realities of the cost of living, the sense of imbalance will remain

For many Sri Lankans, the struggle today is not theoretical. It is lived daily, in grocery bills that keep rising, electricity tariffs that strain monthly budgets and salaries that remain largely unchanged. As the country stabilises after its economic crisis, a difficult question emerges. Is it fair to expect workers to carry the weight of recovery while their incomes stand still?

The reality on the ground suggests a growing imbalance. Over the past few years, the cost of living has increased sharply. Food prices, though no longer rising at crisis levels, remain significantly higher than before. Transport costs continue to burden daily commuters. Utility bills, particularly electricity, have become a major expense for households. At the same time, wage growth has been slow and in many cases, non existent.

For a typical Sri Lankan worker, this creates a constant financial squeeze. A private sector employee earning a fixed salary may find that what was once sufficient is now barely enough. Essentials take up a larger share of income, leaving little room for savings or unexpected expenses. For lower income groups, the situation is even more severe. The gap between earnings and basic living costs is not just uncomfortable. It is unsustainable.

Employers, particularly in the private sector, often argue that they too, are under pressure. Businesses are still recovering from the economic downturn. Higher taxes, increased operating costs and reduced consumer spending limit their ability to raise wages. For small and medium enterprises, survival remains the priority. In such a climate, salary increments are seen as a risk rather than a necessity.

While this argument has some validity, it does not fully address the imbalance faced by workers. Economic recovery cannot be built on suppressed wages alone. If people do not have the purchasing power to spend, businesses will continue to struggle. A weak consumer base ultimately slows down broader economic growth.

There is also a question of fairness. Over the past two years, ordinary citizens have been asked to make significant sacrifices. Taxes have increased, subsidies have been reduced and public services have come under strain. These measures may have been necessary to stabilise the economy, but they have disproportionately affected working and middle class households. When wages fail to keep pace, it creates a sense that the burden of reform is not being shared equally.

The public sector reflects a similar challenge. Government employees have seen limited adjustments to their salaries despite rising living costs. While fiscal constraints make large salary increases difficult, prolonged stagnation risks lowering morale and productivity. 

Another consequence of stagnant wages is the growing trend of migration. Skilled workers, professionals and even young graduates are increasingly looking for opportunities abroad. The reasons are clear. Better pay, more stability and a higher standard of living. While remittances may provide short term relief to the economy, the long term loss of talent weakens the country’s future prospects.

Addressing this issue requires more than short term fixes. Policymakers must recognise that wage stagnation is not just a labour issue but an economic one. Measures to support businesses should be balanced with policies that protect workers. This could include targeted tax relief, incentives for wage increases and stronger social safety nets for vulnerable groups.

There is also a need for greater dialogue between government, employers and trade unions. Sustainable solutions cannot be imposed from one side alone. They must be negotiated in a way that considers both economic realities and social impact. Sri Lanka has made progress in stabilising its economy, but stability without inclusivity is fragile. If the benefits of recovery are not felt by ordinary workers, dissatisfaction will continue to grow. Economic indicators may improve, but public confidence will lag behind.

In the end, the question is not only about fairness but about sustainability. A country cannot move forward if its workforce is constantly under financial strain. Recovery must mean more than balancing accounts. It must improve the quality of life for the people who drive the economy every day.

Until wages begin to reflect the realities of the cost of living, the sense of imbalance will remain. And with it, the question that many Sri Lankans are already asking -- who is this recovery really for?