Monday, September 21, 2020

Business Botswana has no policy on minimum wage, says its President

The mouthpiece of the private sector ÔÇô Business Botswana has said that it has not formulated a guiding policy relating to minimum wage vs. living wage models.

The Business Botswana President ÔÇô Gobusamang Keebine told journalists in the capital Gaborone at a press conference this week that the chamber of commerce has not taken a deliberate stand on the debate yet.

“We have nothing on paper or policy that one can refer you too. We believe that at this juncture it’s better to leave the matter to the trade unions who represents employees and the employers themselves”, Keebine said.

Despite this sentiment, Business Botswana currently has representatives in the team that determines the national minimum wage for various sectors.

Globally, the debate on the best model between the two has been ongoing for a while now.

Meanwhile following an exchange of notes and ideas for most part of 2018 by key players in the work-trade industry, the minimum Wages Advisory Board’s is said to have reviewed minimum wages.

According to the ministry of Employment, Labour Productivity and Skills Development the board is expected to present its recommendations in March 2019.  The last revision to minimum wages was done in 2017 and there has been mounting calls for it to be reviewed as the rates are said to be low. Data from Statistics Botswana, contained in the Formal Sector Employment Statistics 2018, shows that minimum hourly rate increased 52 percent between 2009 and 2017. The current minimum hourly wage rates range from P3.21 to P5.79.

Going into the elections year, minimum wage will be the main talking point. Last year, a motion of introducing living wage ÔÇô which was supposed to replace the minimum wage- was rejected by the ruling party, who are in majority in parliament.

When rejecting the motion brought by the opposition party, Tshenolo Mabeo, minister of Employment, Labour Productivity and Skills Development, said the issue of minimum wages and living wages is before the ministry of Finance and Economic Development which is doing the research and assessment. He said they are looking at the issues of minimum wage and living wage, and only after they have concluded their assessment, his ministry will take it further to see how they can solve the issue.

Mabeo added that International Labour Organisation has assisted the Botswana government with a report focused on finding figures which could give a picture of the shortcomings of minimum wage. He revealed that the report indicated that a major challenge identified has been lack of data.

“I think that waiting for Ministry of Finance and Economic Development to come up with their findings can help us so that when we move on we will have an idea of the standard in which we want our living wage to be in,” Mabeo said it at the time as he shut down the living wage debate.

The debate on increasing the minimum wage has shined light on the country’s increasing income inequality. Botswana is in the top three most unequal countries in terms of income distribution as measured by the Gini Index. Proponents of the minimum wage have urged the government to protect its citizens from exploitation by increasing the minimum wage, and have offered that it will reduce inequality. Businesses operating in Botswana have defended the wages they pay their employees, explaining that the pay what the law requires.

Statistics Botswana’s Botswana Multi-Topic Household Survey (BMTHS) Report 2015/2016, released last month, says in spite of an estimated 689,528 people employed, only 74 percent were recorded as wage earners. In another startling discovery, 24.9 percent of employees who earn in the range of P501 to P1000, followed by 25.7 percent of salaried workers who earn between P1001 to P2000, while about 14.9 percent fall in the earning bracket of P2001 ÔÇô P4000.

The data from Statistics Botswana paints an unsettling picture: around 83 percent of workers earn less than P10,000. The report disclosed that of the 510,953 workers, 74.2 percent are in formal employment, and it is this group that on average earns higher salaries compared to the informal sector.

Meanwhile, in January 2019, Botswana’s neighbor, South Africa put into practice the national minimum wage Act which put the minimum hourly rate at R20 or roughly P15, ensuring that no employee in South Africa will get anything less than R3,500 or P2,700. The move was hailed as part of efforts by the government to tackle wage inequality while also stimulating economic growth as consumer spending increases.

[By the Numbers]

83% – number of workers earning less than P10,000 in Botswana

689,528 – People employed in Botswana

74.2% – Number of formal employees in Botswana

R20/P15 – minimum pay per hour in South Africa

P3.21 – minimum pay per hour in Botswana

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Sunday Standard September 20 – 26

Digital copy of Sunday Standard issue of September 20 - 26, 2020.