Wage freeze sweet music to employers

via Wage freeze sweet music to employers – The Zimbabwe Independent February 6, 2015

RESERVE Bank governor John Mangudya’s pronouncements that Zimbabweans should not expect salary increases this year because the economy cannot sustain them must have come across as sweet music to the ears of employers.

Mangudya’s remarks came a week after Finance minister Patrick Chinamasa said salary increments were “unsustainable and short-sighted” as the Zimbabwean economy remains stuck in the woods.

Workers believe the statements by Chinamasa and Mangudya stifle collective bargaining — which was already underway in many sectors — even employers in sectors performing well would now hide behind the salary freeze.

Workers feel that sectors that are performing well, which are no doubt in the minority as the economy remains in crisis, should be allowed to adjust salaries and wages accordingly.

A fortnight ago Chinamasa told a Confederation of Zimbabwe Industries (CZI) symposium: “I find this salary increment talk very disturbing. Is there a single person out there who does not know that the economy has not been performing? Employers simply cannot afford it; government cannot even afford this.”

However, towards the last general elections of July 2013 Mugabe went on record saying civil servants must be paid salaries that are in sync with the poverty datum line (PDL).

In concurrence with Chinamasa, Mangudya said: “We need to balance the economy first and increase salaries later.”

Mangudya told editors from various media houses last Wednesday at an informal briefing in Harare that there was no scope for increasing salaries when there was not much productivity taking place in Zimbabwe.

“It would be a mistake to increase salaries now because the economy cannot sustain any salary increments. People are just being paid for going to work or for activity, and not productivity. Most companies are in a Catch-22 situation because it is more expensive to fire or retrench a person than to keep him working,” he said.

“Our work ethics have gone bad. We need a paradigm shift on our attitude towards work. There is gross indiscipline and we need to change that.”

During the same CZI symposium, Mangudya said: “The economy cannot afford any salary increases, there is not a single sector performing well enough to afford this privilege.”

While Chinamasa and Mangudya might be applying austerity measures, workers are naturally aggrieved because they still have to contend with the struggle to make ends meet.

According to the Ministry of Finance, the PDL or total consumption poverty line (TCPL) for an average of five persons per household stood at US$511 as of January 2014.

Employees at one of the largest supermarket chain stores in the southern African region were visibly angry after reading Mangudya’s comments, as they feel their employer can afford a salary increase this year.

One of the employees who refused to be named said: “We are already working under difficult circumstances where our employer is taking advantage of the economic situation in Zimbabwe to abuse us. Now that Mangudya has said no salary increments this year for workers, our bosses are going to hide behind this when we know they can afford to give us something.

“Already, we are struggling to make ends meet with our meagre salaries when prices of basic commodities remain high and transport costs are steep. If they want to freeze salaries, then they must also freeze everything else because without that we are going to suffer even more.”

Workers in the mining, agriculture and manufacturing sectors failed to get any meaningful salary increases last year and any hope of getting better pay has now been dashed.

The year ended without any agreement between the Chamber of Mines and Associated Mine Workers Union of Zimbabwe after the employer body refused to increase the current minimum wage of US$227.

The workers’ union demanded a minimum wage of between US$400 and US$500 while the employers insisted that it was not feasible, citing the poor performance of the mining industry.

The employer body argued that chrome and metal prices are performing poorly while the gold sector is also struggling.

They also argued that the provision of free accommodation, education, transport and electricity, among other perks, meant that the workers were already getting PDL-linked minimum wage level.

Gideon Shoko, the acting Zimbabwe Congress of Trade Unions secretary-general said: “It is very unfortunate for the governor to be saying such things as this will only serve to embolden those employers who are already failing to timeously pay workers and pegging wages to the poverty datum line.

“They should have also look at issues of price increases, taxes and other levies that workers are subjected to by government. They should also freeze these. You cannot just focus on the one side of freezing wage increases and ignore everything else.”

If anything, Chinamasa has been quick to raise taxes and even introduce new ones thus raising the cost of living for the workers.
While the rest of the world welcomed significant fuel price reductions due to a fall in oil prices in the global market, Zimbabweans have not enjoyed meaningful benefits, with fuel companies citing an increase in the duty imposed by government. Chinamasa imposed a duty of between 28% and 33% on fuel last month.

In December, he also imposed a 5% excise duty on airtime while his ruling Zanu PF party suggested a new levy to ameliorate the plight of the disabled.

All these taxes add to the value-added tax, pay as you earn, Aids levy and others that the worker has to pay while salaries remain stagnant.