Wednesday, October 4, 2023

Minimum wage could get another twist in Q1:2019


Just under P900 a month – this is what general workers are alleged to be earning at retail giant Choppies Enterprises, a company whose dual listing at the Botswana Stock Exchange (BSE) and Johannesburg Stock Exchange (JSE) is still on suspension.   

In March 2018 emotions boiled over with the workers at one of the Choppies store – Hyper store located at the Westgate Mall in the capital Gaborone downing tools demanding for a better pay.

With songs of “struggle” and some placards written “We want money”, the workers boycotted work for most part of the day.

A day later, the Botswana Federation of Public Parastatal and Private Sector Unions (BOFEPUSU) released a statement cautioning Choppies against subjecting their employees to poor welfare and conditions of service.

“We note that in this country, one of the most unequal in the world, a company like Choppies which make huge profits very little goes to the pockets of the workers who work hard to make those profits. Retail sector workers are some of the most underpaid in the entire country. Workers at retail companies like Choppies are subjected to horrific conditions of service and poor welfare akin to modern day slavery. What is surprising is that Choppies, a proudly local company, which has since grown into a regional multinational, has better salaries and welfare for workers in other countries and yet chooses to neglect those in Botswana”, reads part of the statement sent by Ketlhalefile Motshegwa BOFEPUSU Deputy Secretary General.

While they might not have been aware of it, when they decided to down their tools in March 2018, the Choppies Enterprises workers at the Westgate Mall hyper store 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.

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 be reviewing 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 November 2018, Botswana’s neighbor, South Africa, signed into law the national minimum wage bill 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.


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