Civil Society calls for a Minimum Wage that reflects the increasing cost of living

All about Minimum Wage, Cost Living, Civil Society in Zambia, Minimum Wage in Zambia, Wages and Salaries, Labour Laws and Workplace Rights in Zambia on Mywage Zambia.


By Sanday Chongo Kabange

Zambia is faced with a double burden of high unemployment and underemployment as expressed by consistently low employment generation and low average incomes.

Jesuit Centre for Theological Reflection (JCTR) Coordinator of the Social Conditions Programme Miniva Chibuye says: “This duality breeds higher poverty and hardship in many households”.

Unemployment

The JCTR said it is becoming clear that formal employment has failed to grow to a level where it can absorb excess labour, based on the 400,000 people in formal employment out of a labour force of about 6,000,000.  The perception is that the situation has worsened as a result of the global economic crisis.

This is against the backdrop of proclamations of increased sustained economic growth and employment creation in country documents such as the 2002 – 2004 Poverty Reduction Strategy Papers and the 2006 – 2010 Fifth National Development Plan.

Cost of living

The group notes that of profound concern is the increasing divergence in the cost of living and income levels. For example, the cost of basic needs for an average family of six living in Lusaka as measured by the JCTR’s Basic Needs Basket for the month of October 2009 amounted to K2,200,630.

“Though showing a nominal reduction of about K60,000 from K2,260,680 in September 2009, when compared with the earnings of an average monthly income in urban low cost areas amounting to about K600,000, it is evident that incomes fall far below the requirements for decent human survival,” says Chibuye.

Minimum wage

These low income levels have been exacerbated by the inadequate basic pay currently at K268,800. Taking into account notable allowances such as lunch, transport and housing, the lowest category of worker in Zambia should be paid a minimum monthly wage of K500,000. However, in the light of the current high cost of living, the minimum wage is not sufficient to even cover the cost of basic food alone amounting to K748,800 in October 2009.

Chibuye says, “Undoubtedly, it is difficult for many Zambians, especially the poor, to rent decent houses, meet required nutritional needs, afford quality health care, quality education and meet the cost of utilities such as electricity and water”.

The implication is these households lack money for savings and asset accumulation leading to a regressive impact on the standards of living of the population. When looked at in real terms, the rising cost of living has over the years led to a decline in real wages .Wages adjusted for inflation to reflect the true purchasing power of wages  as a result of high inflation.

Therefore, the intention to review the minimum wage as announced by the Labour Minister is welcome. The minimum wage was last revised in 2006. One of the direct effects is that it will cushion wage earners from the burden of the recent economic crisis. “Revision of the minimum wage would have substantial impact especially on the poor as it will increase their purchasing power and subsequently enhance their human dignity,” says Chibuye.

Furthermore, a substantial raise in minimum wages would enable an increase in government revenue, as currently all employees paid below K700,000 (to be revised to K800,000 in 2010) are exempted from contributing towards Pay As You Earn (PAYE).

Universal Declaration of Human Rights

The question however is: will the minimum wage be anchored upon the principle of a ‘Just Wage’ where the worker is paid a wage that is sufficient to meet the basic food and essential non-food needs to support him/her and their family?  The JCTR reiterates its position that the minimum wage should progressively be tied to the cost of basic needs.  As clearly stated in the Universal Declaration of Human Rights: “Everyone has the right to a standard of living adequate for the health and well being of himself and his family, including food, clothing, housing, medical care and other necessary social services”.

It is hoped that the revised minimum wage will increase in both numeral terms and scope. According to Chibuye, “the government should consider revising the minimum wage by taking into account the inflation annual indexing to avoid eroding the purchasing power of the real wages. Besides this, the minimum wage should widen in scope by being extended to previously sidelined jobs such as domestic work”.

Additionally, there should also be deliberate efforts to increase funding to the Ministry of Labour. This will enable the Ministry to promote oversight of elements of employment such as safety standards and to monitor compliance of the revised Minimum Wages and Conditions of Employment Act (Cap. 276).

JCTR says in a news release, if the daunting challenge of unemployment and underemployment is to be overcome, the inherent dignity of all employees should be upheld by valuing their work and compensating them justly.

 

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