Cost of living, minimum wage gap widens

 

Urban workers on the national minimum wage would still have to find other means of generating income to afford town life following the increasing disparity between the minimum wage and the cost of living.

As at March 2018, an average family of six in the urban areas requires at least K186 648 to survive in a month, against the minimum wage at around K25 000, published figures from the Centre for Social Concern (CFSC) have shown.

This means already, a worker earning K25 000 will have to deal with a deficit of about K161 000 if he or she is to afford a descent life.

Urban poverty is said to be on the rise

During the same period last year, the cost of living was K173 445 whilst the minimum wage was K19 000.

In October 2016, Finance Minister Goodall Gondwe announced government’s move to raise the minimum wage by 24 percent from K19 000 to K25 000 a month, a development which was contrary to the Malawi Congress of Trade Union (MCTU) earlier proposal of 58 percent  (K33 000) wage hike.

Feeling the pinch of the widening gap the most are Mangochi families, whose cost of living now stands at K204 193, followed by those in Blantyre K196 436 and Zomba at K190 729. The same sized family in Lilongwe will have to spend K190 398, K153 184 in Mzuzu, while the same family would have to spend K148 946 in Karonga.

Working as a shop attendant in Blantyre and having a family of four, including his wife to feed, Robson Banda’s K30 000 wage is but an insult to the quality of life he strives for.

“I have to walk daily from Chirimba to Blantyre and back as well as skip proper lunch so that at the end of the day, I am left with atleast something to show for. My wife runs her business for our day to day sustenance while my salary is all spent on rentals, maize and supporting my kids with the little that is left of me,” he said.

Consumer Association of Malawi (Cama) executive director John Kapito said in an interview on Tuesday that while the cost of living has never been equated to inflation or minimum wage in Malawi, the disparity shows that it is very difficult to survive on a daily basis for workers earning less than the minimum wage, a situation he said also affects productivity.

Economics Association of Malawi (Ecama) president Chikumbutso Kalilombe said while most employers especially for labourers pay more around the minimum wage, this is not adequate to support the cost of living then you have a working class in perpetual debt and which fails to save for the future.

“It also leads to perpetuation of poverty as the funds are not adequate to enable investment in the new generation,” he said.

Chancellor College economics professor Ben Kaluwa said observed that the widening gap only spells a wall between the waged and non-waged people, a situation he said works mostly to the disadvantage of the non-waged.

Malawi Congress of Trade Union (MCTU) secretary general Dennis Kalekeni observed that much as the union is aware that the minimum wage does not have to reflect the cost of living, the gap doesn’t have to be too big.

“This situation could have been avoided if we had tamed corruption, cashgate and promoted policies that encouraged more of production,” he said.

Treasury was not immediately available for comment. In an earlier interview however, an official from Treasury said that demands for minimum wage increment should be balanced against levels of economic activities in the country observing that since most firms are struggling economically, such demands may force them to downsize and layoff people which should be discouraged at this stage. n

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