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Top economist questions viability of private sector’s poverty level wages
- Reveals entry-level salaries for degree holders range from Rs.30,000 to Rs.40,000—barely enough to meet minimum monthly income required to stay above poverty line
- Opines it is no wonder they prefer jobs abroad in greener pastures
- Stresses need to update archaic labour laws
By Shabiya Ali Ahlam
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Dr. Anila Dias Bandaranaike |
Sri Lanka’s private sector is quick to lament the brain drain and staff shortages but it seems that it is contributing to the problem by failing to offer salaries that support a decent standard of living.
Dr. Anila Dias Bandaranaike, former Assistant Governor of the Central Bank, delivered a stark assessment yesterday, revealing that the entry-level salaries for degree holders in Sri Lanka range from Rs.30,000 to Rs.40,000—barely enough to meet the minimum monthly income required to stay above the poverty line. “If a household is fortunate enough to have two wage earners, each must bring in at least Rs.30,000,” Dr. Bandaranaike said, speaking at a panel discussion hosted by the Sri Lanka-Korea Business Council, under the theme ‘Sri Lanka’s Future Forecast, Scenarios and Challenges’.
“This is the scale after recent wage increases. In 2022-2023, the salaries ranged from Rs.15,000 to Rs.25,000. Do businesses really expect employees to live in poverty? It’s no wonder they prefer jobs abroad in greener pastures.”
The senior economist acknowledged that the wages must be linked to productivity and that the businesses need to monitor their bottom line but she insisted that this does not excuse the failure to pay decent wages.
She highlighted the stagnation of the formal private sector as a significant issue, pointing out that the labour market dynamics are a crucial factor. While economic growth is essential to meet the future commitments, Dr. Bandaranaike emphasised that such growth is impossible without workers. Sri Lanka’s labour force participation rate remains below 50 percent, with only one in every three women joining the workforce.
“For many women, it’s simply not worth joining when their salaries can’t even cover childcare and elderly care expenses,” Dr. Bandaranaike noted, addressing the panel, which also featured Verite Research Executive Director Nishan de Mel, Advocata Institute Chairman Murtaza Jafferjee and Hatton National Bank MD/CEO Jonathan Alles. Meanwhile, 200,000 to 300,000 Sri Lankans leave annually for migrant employment, exacerbating the employee shortages in the local businesses.
Yet, despite these challenges, only 30 percent of Sri Lanka’s labour force is employed in the formal private sector companies. To address these issues, Dr. Bandaranaike urged the stakeholders, including the Employers’ Federation, private sector organisations and trade unions, to collaborate on solutions rather than leaving it to the government. “You know you circumvent outdated laws that no longer serve the current economic landscape. It’s better to prioritise revising these laws, making it a win-win situation. I also recommend that the professional private sector institutions lobby hard for government downsizing,” she said. Dr. Bandaranaike warned that unless the stakeholders prioritise these reforms—updating archaic laws, reducing the bloated public sector and raising private sector wages—economic stability and improvement would remain out of reach.
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