Salary, Wages and Cost of Living Adjustment (COLA)

Javed Ahmad


I find it quiet difficult to understand that how can an employee sustain an arrear of salaries for 72 months, which is about 6 years! This happened to 8 doctors and 57 other staff of Magura Sadar Hospital as reported by the Daily Star.


It took six years for them to make a protest on this matter demanding resignation of the minister of health for his failure to comply with the court order to pay off the debt. Without any direct inquiry on this matter it is hard to imagine why or how the health ministry managed to delay the payments and how did the employees sustain themselves for such a long time without any pay. Frankly, it defies all imagination.


According to our constitution, our government is supposed to comply with the following -


“2A. The state religion.

The state religion of the Republic is Islam, but other religions may be practiced in peace and harmony in the Republic…


8. Fundamental principles.

(1) The principles of absolute trust and faith in the Almighty Allah, nationalism, democracy and socialism meaning economic and social justice, together with the principles derived from them as set out in this Part, shall constitute the fundamental principles of state policy.

(1A). Absolute trust and faith in the Almighty Allah shall be the basis of all actions…”


A parallel hadith in reference to this particular pay issue is as follows -


Narrated Abu Huraira: The Prophet said, "Allah says, 'I will be against three persons on the Day of Resurrection: −1. One who makes a covenant in My Name, but he proves treacherous. −2. One who sells a free person (as a slave) and eats the price, −3. And one who employs a laborer and gets the full work done by him but does not pay him his wages.' " (Bukhari 3.430).


Therefore, if we are to run our affair on the basis of teachings of Islam then we are supposed to pay salaries for the work rendered as soon as possible and as soon as the job is done; because if we don’t, then we are not showing ‘absolute trust and faith in the Almighty Allah’.


There is another issue relating to the minimum wage in Bangladesh for the workers working in the garments industries. After a long struggle and debate during the Care Taker Government (CTG) the minimum salary was set to Tk 1662.50 a month, and now it is demanded to be increased to Tk. 5,000.00! And of course the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) are giving their own logic and reason why it cannot happen.


This is an ongoing struggle between the public and private organizations where the government tries to compel the private businesses to comply with some rules and regulation that sometimes becomes impossible to comply with. This wage issue is one such case.


The rule of thumb of this game is, orders will flow to this country as long as the cost of manufacturing (CM) is lower than the other competing countries. If we increase the basic pay then the CM will rise that would result in fewer order coming in to Bangladesh. Therefore, instead of pay hike, government should consider pay subsidy to the workers to keep the industry going and to keep the inflow of foreign currencies.


To minimize this problem, if the government allows their officers to work in private organization on liens so that they could get to know the problems and issues that take place in the private industries. Their exposure in the private industry would help and equip them to understand the core issues and develop advocacy on that basis. In the Private-Public-Partnership (PPP) program this methodology could be included. The government officers could either take up a job at an organization or act as an independent advisor or observer (in case of senior officers) for a certain time and period.


Alternatively, the government could form a council of advisors consisting of retired government officials who are involved with different private organizations. The member of the council could then become a valuable resource of advisement for the government to understand the real life issues that are hidden within the private organizations.


There are many private organizations however who intentionally delay payment of salary and wages to their workers, thus defying the following hadith -


Ibn Maajah (2443) narrated that ‘Abd-Allaah ibn ‘Umar (may Allaah be pleased with him) said: The Messenger of Allaah (peace and blessings of Allaah be upon him) said: “Give the worker his wages before his sweat dries.” Classed as saheeh by al-Albaani in Saheeh Ibn Maajah.


The matter is not to be taken lightly. Before the government presses the private enterprises to pay on time, they themselves must do the same. In my experience I have seen in the USA that the Jews, Christians and Hindus are more prompt and sincere in making payments of salary and wages, whereas the Muslims owners or managers of a business are late payers. Often times there were no problem in cash flow to pay the employees on time, it is simply their habit to pay late. So what does this tell us? The non-Muslims are more Muslim than the believers! How disgraceful.


Same situation is also present in Bangladesh where employers tend to delay payments to their employees for no valid reason. It is simply their habit to pay late. Government could come up with a plan to penalize the businesses who have a habit of paying late for no valid reason and force them to comply with the constitution and Islam.


Cost of living adjustment (COLA) is something that the government should focus on. It is the duty of the government to contain and control inflation to minimize living standard adjustments. If the inflation is out of control then it will affect the living standards of the citizens. If the inflation is controlled and contained then standard of living would remain the same or would remain will negligible effect. Dealing with inflation is a serious matter and an independent council consisting of economists and concerned citizens could be formed to do research and control advising; because, without COLA, the uncontrolled inflation would bring the national economy into chaos. It cannot continue forever.


Here is a tip - there is a close relationship between inflation and interest. I would like to leave this challenge to the economists of the world to figure out how. It would be a great topic for a PhD dissertation in Economics.




Doctors, staff lock hospital demanding arrear salary:


RMG units not ready for Tk 5,000 minimum wage:


Interest Rates: Another Reason for States to Own Their Own Banks:


What is the big picture for human evolution? Evil govt. liars making us debt slaves? 2012? ETs? JC?: