Government Pay Hike Raises Concerns Among Private-Sector Employees

The government is set to introduce a new pay scale for public employees for the first time in 11 years, recommending a minimum basic salary of Tk 20,000 and a maximum of Tk 160,000. Officials have indicated that the new salary structure will be implemented in phases after considering the recommendations of the Ninth Pay Commission.

While the move has brought relief to government employees, many private-sector workers and middle-class families fear it could trigger higher rents, education costs, transportation expenses, and prices of everyday goods.

Bangladesh last introduced a national pay scale for government employees in 2015. Since then, inflation and the cost of housing, education, healthcare, and daily necessities have risen steadily. According to the government, declining purchasing power caused by inflation has made a new pay structure necessary.

Sources said the Ninth Pay Scale could take effect from July 1, the beginning of the new fiscal year. The proposed structure retains the existing 20-grade system while recommending that basic salaries across all grades be increased by two to two-and-a-half times.

Under the proposal, the minimum basic salary for Grade 20 employees would rise from Tk 8,250 to Tk 20,000, while the highest basic salary for Grade 1 officials would increase from Tk 78,000 to Tk 160,000. Including housing and other benefits, the total monthly compensation for employees in the lowest grade could reach Tk 41,908.

The commission has also proposed reducing the salary gap between the highest and lowest grades, lowering the pay ratio from 1:9.076 to 1:8.

Mohammad Nobir Hossain, a Grade 13 officer at a government office in Dhaka, said he has struggled to support his family under the current pay structure.

“Living expenses have increased significantly since 2015. Managing household costs, rent, and my children’s education has become very difficult,” he told Agamir Somoy.

According to Nobir, the new pay scale is not an added privilege but a necessary adjustment to keep incomes in line with inflation.

The announcement, however, has left many private-sector employees worried.

Khaled Hasan, an employee of a private company, said raising government salaries is understandable, but the impact on rents and other living expenses could make life even harder for those in the private sector.

“Our salaries won’t increase at the same pace,” he said.

Shamim, a resident of Badda and an officer at a private bank, echoed the concern. He said that although his salary has increased somewhat in recent years, spending on groceries, children’s school fees, transportation, and rent has climbed much faster.

“If living costs rise again, it will become even more difficult for middle-class families to make ends meet,” he said.

Former Bangladesh Institute of Development Studies (BIDS) Director General and former Chief Economist of Bangladesh Bank Mustafa K. Mujeri said the salary adjustment is both reasonable and necessary after such a long gap.

He told Agamir Somoy that government employees’ real incomes have declined because of inflation. However, he stressed that authorities must strengthen market monitoring to prevent unjustified increases in rents and commodity prices.

“There is no direct economic relationship that automatically causes house rents to increase whenever government salaries rise,” Mujeri said. “However, news of higher incomes for a large group of people can create a psychological effect in the market. Some landlords or businesses may use that as an excuse to raise prices, which is not justified.”

He added that the main drivers of rising rents are rapid urbanization, increasing land prices, higher construction costs, housing shortages, and long-term inflation—not higher government salaries.

According to the Ministry of Finance, implementing the new pay structure will require the government to spend thousands of crores of taka in additional funds. Officials expect the move to improve the living standards of public employees and help them cope with inflation.

Economists say higher incomes for one segment of society do not necessarily increase the purchasing power of the population as a whole. They warn that if rents and service charges rise without justification following the salary adjustment, the heaviest burden will fall on middle-class households and millions of private-sector employees.