Living wage could lead to retrenchments—ministry

Ministry of Labour, Skills and Innovation has warned that workers continued demand for a living wage could lead to massive retrenchments as the economy remains small to support such adjustments.

In wake of increasing cost of living, workers have been demanding implementation of the living wage—a minimum income  necessary for a worker to meet their basic needs such as food, housing and clothing—to match the cost of living.

Commissioner of labour Hlale Nyangulu, in an interview last week, said minimum wage is a complex matter as it depends on affordability by the employer.

“Sometimes, if we set a minimum wage much higher, the employer is unable to sustain that wage, obviously that employer will resort to retrenchment, resulting in a lot of workers losing their jobs,” he said.

Nyangulu said there is need to balance in terms of affordability by the employer, sustainability of the enterprise and the needs of the workers.

He challenged workers to use the collective bargaining approach to discuss with employers for improved wages.

Centre for Social Concern (CfSC) executive director Jose Kuppens said the focus on better working conditions stems from the international approach where in some countries, consumers only buy products from producers that provide decent working conditions.

“What we are looking for is a win-win situation where all players involved in the production value chain are satisfied,” he said.

Employers Consultative Association of Malawi (Ecam) executive director George Khaki said in an interview they are ready to implement the living wage provide there is a conducive environment for better returns.

He said: “If you are not generating sustainable profits from your production, there is no way you can reward workers accordingly.

“One of the issues that we are facing is access to cheap capital to induce productivity as well as shortage of skills.”

Malawi Congress of Trade Unions (MCTU) treasurer general Joseph Kamwendo said workers are facing challenges to access decent work and incomes.

He said the living wage is a must in an ideal situation.

Currently, the minimum wage in Malawi is pegged at K962 per day, translating to K25 000 per month.