Wednesday, September 27, 2023

Jumping Botswana’s wage gap….

They might not have been aware of it, but when they decided to down their tools on Wednesday, Choppies Enterprises workers at the Westgate Mall hyper store in the capital Gaborone might have resuscitated an old labour sector debate ÔÇô Living wage vs. Minimum wage. Globally, the debate on the best model between the two has been ongoing for a while now.

Workers and employers around the world argue over the issue of a minimum wage. Workers say they want to receive a minimum “living” wage that permits them to meet the most basic needs of life such as food, clothing and shelter.

Employers, on the other side say that high labour costs will affect their company’s profitability and its value to shareholders. And governments worry that they will lose trade, investment and tax revenues if labour costs within their borders go too high.

Back in the capital Gaborone, Botswana the hard truth is that when they boycotted work this past week, the Choppies workers wanted the world to know that they draw wages (P5/Hour) that are insufficient to allow them to live a decent life.

The Westgate Mall Hyper Choppies store workers’ push to have their salaries increased could play out on the doorstep of the entire retail sector, and if the trade biggest trade union federation in the country ÔÇô BOFEPUSU gets its way, it could have a ripple effect into other sectors. Other players in this sector include Botswana Stock Exchange listed Sefalana Holdings as well as South African retail giants Pick n Pay, Spar and Shoprite amongst others.

While Botswana’s trade labour laws currently favours minimum wage which is revised on annual basis, BOFEPUSU ÔÇô the Botswana Federation of Public Parastatal and Private Sector Unions says it advocate for living wage as compared to minimum wage.

For many workers in Botswana, this will mean a considerable jump in their salary, while others may see only a small rise.

At the last review, the labour ministry set the retail sector minimum wage at P5.14 per hour. This is exactly the same amount that Choppies Enterprises pays to its workers including those who picketed at the Westgate Mall store on Wednesday. The general feeling is that Choppies is not the only “bad boy” when it comes to sticking to the minimum wage as set by the government. Choppies was however unfortunate to have some of its workers being the first to publicly raise the red flag about what is going in the retail sector and possibly even across other sectors in the domestic economy.

With boiling emotions, the picketing workers, however shared, with whoever cared to give them an ear that the dually listed retailer usually makes odd deductions from their basic pays. Some voluntarily shared their pay slips which showed that they earned as little as P633.33 in the past month.

An economic commentator and managing director at Econsult Botswana ÔÇô Dr Keith Jefferies explains, without reference to the Choppies saga that if the minimum wage is raised too much it could lead to unemployment. Jefferies, the former Bank of Botswana deputy governor possibly subscribes to the notion that a huge hike in minimum wage would result in companies that have a large portion of their workforce on minimum wage being unable to bear the cost of the increase resulting in job losses.

On how urgent Botswana needs to attend to the issue of wage gap given recent developments in the labour sector, Dr Jefferies says, “I think here is argument for raising the minimum wage, although I do not know by how much, given that the share of GDP being paid in wages has been declining and inequality is high”.
As it prepares to usher in new administration this Sunday, Botswana remains with a challenge to bridge the wage inequality gap, and improve overall living wage for entry-level, unskilled and semi-skilled workers.


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