Malawi Congress of Trade Unions (MCTU) yesterday demanded an increase in the minimum wage of at least 100 percent to cushion workers from the impact of rising cost of living.
In an interview yesterday, MCTU president Charles Kumchenga said the prevailing rates are far below what is needed for an average Malawian household to survive given the continuous price increase of essential goods and services.
The minimum wage as revised in June this year is at K126 000 per month for employees in formal employment and K72 800 for domestic workers.
Kumchenga said the current economic situation has eroded the workers’ purchasing power, making it difficult for them to afford basic needs such as food, transport and shelter. He thus asked government to take immediate steps to ensure that all workers are fairly compensated in line with the prevailing economic conditions.
He said: “When we are talking about minimum wage, we don’t just bring our personal issues, no. We consider the employees we are representing, how much they are getting, what is the cost of living and many other [factors], including inflation.
“What we are looking for [minimum wage increment] can be beyond 100 percent because we are looking at the cost of living as compared to salaries of the workers. Price for fuel, transport and other basic needs have gone up. So, we want to meet government on how best we can move together.”
The union’s call comes at a time Centre for Social Concern (CfSC) data show that the average cost of living for an average family of six in urban and peri-urban areas now stands at K910 131.
Based on the CfSC basket of basic needs, the minimum wage for a person in the formal sector is enough to cover about 13 percent of needs to survive.
According to CfSC, the average household expenditure is largely driven by increases in maize prices and transport costs. The organisation further noted that maize, the country’s staple food, has become increasingly expensive, placing additional pressure on low-income households.
Reacting to MCTU’s proposal, Employers Consultative Association of Malawi executive director George Khaki called for a cautious approach to the proposed 100 percent minimum wage upward adjustment.
He said while employers understand the challenges workers face, any revision of the minimum wage must follow proper legal and economic procedures.
“The Employment Act guides how and under what conditions the minimum wage can be revised. Therefore, it is up to us to examine whether those conditions have been met and if the industry is in a position to adjust wages further, having just done that in June,” said Khaki.
While acknowledging that the cost of living has indeed gone up, Transporters Association of Malawi spokesperson Frank Banda expressed fear that implementing a 100 percent minimum wage increase will cost some employees their jobs.
He said MCTU should also consider that the country is experiencing foreign currency shortages, which force businesses to buy dollars on the black market that also causes spare parts prices to go up.
“I think we shouldn’t just focus on the minimum wage increment, but also the consequences of that because surely some employees will end up losing their jobs,” said Banda
In a separate interview, a small-scale business operator Harold Chidzamika, who runs a tailoring business in Ndirande Township in Blantyre, said that in the current economic environment, it will be difficult to sustain his business if the proposed 100 percent minimum wage inclement will be implemented.
In June this year, then former minister of Labour Peter Dimba increased the minimum wage by 40 percent from K90 000 to K126 000 per month while the rate for domestic workers went up from K52 000 to K72 800 per month and that of micro-enterprises increased from K75 000 to K105 000 per month.
