Higher minimum wage okay, but…

 
With the government expected to announce a new minimum wage for the private sector any of these days, there is no doubt that hundreds of thousands of workers are keeping their fingers crossed for next month. They will be asking themselves whether what will be ultimately said will shock them or leave them pleasantly surprised.

In November 2007, the government announced a new minimum wage for the sector that were to become effective on January 1, 2008. The new rate as announced by the then Labour, Employment and Youth Development minister were somewhat shocking, especially with respect to those for the industrial sub-sector.

It is understandable to concur with the government’s decision of downsizing the minimum wage for export-oriented industries, particularly those exporting at least 25 per cent of their products and labour-intensive industries (with 300 and above workers) from the supposed 150,000/- to 80,000/- a month on grounds of protecting the industries’ financial interests and boosting government revenue figures.

The government said since production costs were high, what with high electricity tariffs, arguably the best way to out-compete external market forces was for our own export-oriented industries to ensure their products were more affordable.

It was argued that the feat could hardly be achieved if they were to pay their workers a minimum wage of 150,000/- a month while still expected to operate at ridiculously exorbitant costs.

For labour-intensive industries, it was bluntly stated that there was no way they could pay their workers a minimum wage of 150,000/- and still remain in business.
Given the harsh conditions, the government sought to spare manufacturing industries troubles that would see them come tumbling down.

Many workers were bitter about the new that was finally announced – 80,000/- a month. The government declared that the Wages Boards had considered things like the cost of living, needs of workers and their families and the capacity of employers to pay as per existing legislation on remuneration rates in the country.

The fact that the government considered the ‘cost of living’ and ‘the needs of workers’ families’ and came up with this figure is beyond the citizenry. The new wage announced took effect in 2008, clearly relating little to social and economic conditions them prevailing and therefore falling well short of workers’ expectations.

The prices of food and the other basic needs have no respect for the fact that poverty is endemic in many parts of our country. We therefore hope the government will seriously consider the people’s plight and look into ways to mitigate the impact of the harsh facts relative to the need to make Tanzanians in their tens of millions lead better lives.

This is not to suggest that raising the minimum wage will necessarily translate into a higher standard of living for the majority of our people. In fact, the intervention could as well boomerang, as evidenced by corresponding hikes in house rents, etc., that have commonly followed announcements of a higher minimum wage.

So, as workers and the nation as a whole await ‘good news’ from the government with respect to the minimum wage, we must remember that the adjustments will not necessarily promise anybody a better life.

SOURCE: THE GUARDIAN