When the middle class tighten their belt, these people suffer the most

Illustration: TBS

Shahidul Islam works as a laundryman in Adabar, Dhaka. Father of two children, he had a moderate flow of income when he admitted his elder son to a private university to study BBA. 

"I wanted him to become a banker," Shahidul said. "I took loans to bear his educational expenses and paid those off with a hope for better days."

But before his son could complete his degree, the pandemic put a stop to everything.  

"I could earn around Tk600 a day before the pandemic. Then my income dropped to less than half. My son also couldn't get a bank job after he graduated as we don't have proper links," Shahidul said. 

Empty shelves

Photo: TBS

Md Mojammel is a small grocer in Goran, Dhaka. In the last six months, his income has dropped significantly as the price of the products he sells has increased. 

"Even six months ago, I used to buy one egg at Tk6. Now I buy it at Tk11.60. I used to buy these chips [indicating a certain brand of potato crackers] at Tk18, now I buy them at Tk20," Mojammel said. 

"Name any product and the price has increased. But in comparison, my income has not increased and my Tk2 profit has remained Tk2," he added. 

Mojammel is now struggling to keep enough stock. When we interviewed him, he didn't have the eggs he mentioned in his store. Many other products were also absent. 

"At least one-third of my sales have dropped. It is going to be tough to provide for my family."  

At some point in 2022, his income increased a bit. However, in the last half of the year, it only kept declining.  

"My dream of getting my son a banking job was gone, so I bought him a bike to work as a Pathao Rider. I still couldn't pay the home rent that has remained due since the time of Covid," he said. 

The Business Standard recently interviewed people from around 20 different types of occupations who, like Shahidul, belong to the working class and whose livelihood is directly connected to the expenditure of the middle class. 

From electricians, tailors, furniture shop workers, house helps, mobile banking agents, roadside restaurant owners to nursery workers, and those working in beauty parlours, all shared their worries and tales of shattered dreams in the backdrop of the ongoing economic hardship that has driven the country's middle class to tighten their belts.  

We also interviewed some people from the middle class to understand how they are reducing their expenses. It appears they are now spending only on basic necessities, which has adversely impacted the incomes of Shahidul and others like him.   

According to the Labour Force Survey (2016-17) by Bangladesh Bureau of Statistics, about 85.1% of Bangladesh's 6,35,04000 labour force are engaged in informal employment, while 17.2% of them are engaged in elementary jobs. 

Elementary occupations are usually simple and routine tasks that require the use of handheld tools, and often some physical effort. It is similar to the job that Ripon from Pirgacha, Rangpur, does; he works in a decorator store in Khilgaon. 

No work, no income

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Hailing from Chandpur, Anwar Hossain works at various furniture stores in Dhaka on a daily basis. There are days when he doesn't have any work, and so, no income.

In recent months he has found himself in a difficult situation. 

"I work on a daily basis. I don't get to work many days in a month now. While my income has not increased, the price of everything else has," said the father of two. 

Both of his children are studying in Madrasas. 

"It is hard to provide for them now. My expenses are much more than what I earn. I am worried about the future of my family," Anwar said. 

"We had five workers before. Now I am the lone worker. The owner had to lay off the others," Ripon said, adding, "the struggle began with Covid. We had no work during those months. But just when things started to look a little better in 2022, it got worse again."

"We used to have work almost every day in the past. Now we don't work even twice a week. As a result, the owner cannot pay me regularly. But how can I complain? I am the one who is working and I know the state of the business," Ripon said. 

The father of a two-year-old, his family requires extra money and attention for the baby. But due to lack of regular income, Ripon often has to live on loans from others. 

"This is the work that I have been doing. Also, it is not like there are many options to choose from, if I wanted to switch jobs. I don't know what to do," he sighed. 

We found an equally sorry state of business in a furniture store nearby. 

Soma Door and Furniture owner Nitai Mondol said, "Even six months ago, I had a monthly sale of around Tk5 lakh, but now I don't even sell Tk1 lakh a month. I have already laid off three of my 10 employees."

Khokon, a worker at Crystal Gents' Parlour, said, "I can say at least 20% of our income has dropped in recent months. When I used to earn Tk1,500, I used to get Tk700 after paying the store owners' share. Now, even on a good day, I get Tk500."

"The store owner loses Tk15,000 to Tk18,000 every month," he added. 

A young customer named Niaz said he has changed his hairstyle so he doesn't have to come to the salon too often. 

"Everything is so costly now and with my salary, I cannot afford them. So, I am spending my money only on things I cannot avoid these days," he told us. 

Rickshaw ride, a luxury

Photo: TBS

A rickshaw puller in the capital, Abdur Rahman hails from Kurigram.

"I married off my three daughters. I have a son to raise. After the Covid lockdowns were lifted, my income increased," Rahman said. 

However, in the last few months, the number of passengers has decreased, affecting his income.

When asked if he knows why he is getting fewer passengers than before, he said, "We don't know why…Maybe because business is dull or people are losing jobs." 

Rahman, however, is not worried about the future. 

"Allah will get me going. If you can work hard, no problem is a problem," he said.  

Several others like Niaz belonging to the middle class shared with us how they are reducing their expenditure. 

"Several months ago, I bought some clothes that needed to be tailored," said a housewife requesting anonymity. "It is not that I don't have the money to pay the tailor, but our earnings are drying up so quickly that I do not quite feel like doing it."   

The pressure that has been building on the middle class lately was not derived only from the inflation since the Russia-Ukraine war, Professor Dr Selim Raihan, executive director of Sanem told The Business Standard.  

"We found our middle class under enormous stress during the pandemic as well. At the end of 2021, when everything started to become normal, there was a sort of recovery. But the middle class once again stumbled due to the 2022 inflation. It has not eased yet. The pressure is still there," Professor Raihan said. 

"What I would say, there has been a massive shock on their real income. As a result, they had to cut down on their expenditure a lot. Except what they deem as very necessary, they are cutting down costs in other areas," he said. 

"For example," the professor further explained, "there have been reports that a lot of spending on recreation has been cut. Maybe a middle class family would travel once or twice a year, but now they are not doing so." 

"I even know people who used to keep daily newspapers but now they no longer do. Maybe they would send clothes to the laundry before, but now they are either not doing it or washing it home themselves," he added. 

What Professor Raihan said was reflected in rickshaw puller Malek's observation, when we spoke to him at the Moghbazar intersection. 

"I charge more fare now, but my income has dropped more than before. I get fewer trips these days," Malek said. When asked why this happened, he said, "Maybe people take the bus more." 

Indeed we met pedestrians on the streets of Dhaka who said they walk more these days to save money. Instead of taking rickshaws, as they once used to for more comfortable rides, they now race after buses. 

Transaction failed

Photo: TBS

Jamal is a bKash agent and stationary seller in Moghbazar. He recently relocated his shop from a corner to near the main road. 

Father of a two-year-old baby, Jamal is experiencing falling income in the last few months.  

"I used to transact around Tk150,000 per day before. But now, transactions are lower than Tk100,000 per day. The transaction fee we earn is meagre," Jamal said. 

"So, my earning has also dropped. Sales of other stationeries have also dropped," he added. 

With a young child to raise, running the family has become a challenge for Jamal. 

"What I would say is they are axing non-food spending like transportation, medication, health, education, lifestyle, recreation etc. Maybe they don't have trouble putting food on the table, but their living standards have taken a hit," Professor Raihan said. 

In Khilgaon, we met a beauty parlour owner named Ankhi. 

"I get fewer customers than before now. Even the girls who still come here take the services that are not expensive. It has reduced my income," she said. 

So, when might the situation improve and the middle class regain their living standard? 

Professor Raihan replied, "When that might happen is kind of uncertain. While the recovery process is slow, new shocks are being added to the pressure. For example, electricity and gas prices are increasing and you may see at some point house rents may also increase… these are only adding to their [existing] pressure."

"For [the recovery] to happen, their real income has to increase, inflation-led pressure has to decrease, and there should be expansion of economic activities so that their jobs and income are ensured," he said, adding, "I think our middle class is under more pressure than at any other time."