eBusiness Weekly
Fidelis Munyoro
Companies are against proposals to come up with a national minimum wage by indexing a proportion of the August, 2018 poverty datum line (PDL) to the exchange rate, arguing that it is not sustainable.
This approach, according to Employers Confederation of Zimbabwe (EMCOZ), threatens a re-dollarisation of the economy because the US dollar becomes the point of reference for all pricing including wages.
The Tripartite Negotiating Forum (TNF) has already agreed that the economy must run with the local currency with a proviso that the authorities will commit to local currency stabilisation and contain money supply to targeted levels.
“The ghost of the US dollar continues to influence pricing including wages and needs to be exorcised from our minds if the transition to local currency is to become a reality,” Emcoz said in a statement recently.
Tripartite Negotiating Forum (TNF) talks on salaries and wages reached a stalemate last recently, with the Government and labour on one side agreeing that there should be a minimum wage, while business rejected the proposal. It was expected that the three would find common position to cushion workers and spur economic growth.
EMCOZ is of the belief that National Employment Councils negotiations are the best platform for dealing with sector specific issues such as minimum wages.
“The NECs are the platform for collective bargaining and this process takes into account all relevant sectorial peculiarities,” said EMCOZ president Israel Murefu. The Labour Act mandates NECs with the responsibility of dealing with minimum wages in particular and specific sectors.
Murefu said since the NECs were sector based, they were familiar with the economic fortunes and performance of their sectors more intimately than any other external institutions, TNF included.
“For example, the mining sector will differ specifically from tourism as much as the financial sector differs from the private security industry,” he said.“
In addition, some sectors like the tobacco industry and tourism, due to their internal peculiarities are further split into sub-sectors which assist in wage negotiations because of other finer differences. This is an acknowledgement that sectors and sub-sectors are not homogeneous.”
Murefu said the approach taken by their social partners was blanket and advocated a one minimum wage for the country but was not appropriate given national circumstances.
“A blanket similar wage policy ignores the issue of peculiarities and seriously threatens the continued existence and viability of some sectors including the going concern status of players therein through loss of competitiveness,” he said.
“This is because it creates a scenario where it would be cheaper and attractive to import finished goods that are currently being produced by some of these sectors which arises from loss of competitiveness leading to increased unemployment. “A blanket national minimum wage is a form of price control which runs against the spirit of TSP which clearly espouses a market driven economy.”
The proposal by business to deal with erosion of incomes and wages is very simple, according to EMCOZ, arguing it requires to look at the PDL as at August, 2018 (which is consistent with the TNF technical committee recommendation) and then look at each sector to see what proportion of the PDL a worker was earning before coming to the current PDL to determine what workers should get.
“So if a worker could afford 80 percent of the August, 2018 PDL through this process and has fallen below that ratio that worker is compensated for value erosion or restored to the same ratio of current PDL,” argued Murefu.
“The PDL is the accepted measure of minimum value for employment and it has always been a target benchmark used in collective bargaining across sectors. “This would only be a starting point as NECs would then continue to carry out sectorial based negotiations based on the fortunes and challenges being faced by each sector.
“For example, some sectors are affected by power outages more than others yet some are affected by water, fuel and foreign currency shortages in a different way from others while others face stiffer competition from imports than some.
“The drought will also affect negatively inputs and supplies to certain sectors while the same impact will not apply to others.”
Murefu said it was instructive to continue looking at a proportion of current PDL that an industry or sector could afford as a reference point.
Another policy measure the EMCOZ chief suggested was to look at regional parity for wages in respect of similar skills, jobs as well as regional productivity and capacity utilisation and then determine minimum wages for each sector taking into account other variables.
