Monday, September 28, 2020

Parley throws “Living wage” motion out the window

The motion to introduce a decent living wage in the country was rejected on Friday after majority of members of parliament voted against it.

The motion brought by Shaun Nthaile, an opposition member of parliament, sought to address the disparity between minimum wage and the ever rising costs of living. Nthaile presented that the living wage will allow people to lead decent lives as it estimates the cost of living and makes provisions for day to day living. While the minimum wages are laid down in law and enforceable, the living wages are not prescribed by law and therefore cannot be legally enforced.

The motion received support across political divides but what they differed upon was urgency and implementation of it. 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 will be doing the research and assessment.

“They are looking at the issues of minimum wage and living wage. I believe that after summarising their work, they will take it to our ministry, where we shall assess it further to see how to solve these issues,” he explained. “Let us wait for the work that is carried out by those from the Ministry of Finance, which I take to be very important because, they will be tackling different issues which we can also look at while looking at the issue of living wage.”

Botswana faces a number of development challenges leading to high levels of poverty, inequality and lagging human development outcomes. The country’s narrow economic base has been dominated by the mineral sector for the past five decades. Private sector growth, while positive, has not been able to keep pace with the much faster growth of the mineral sector and government.

The economy remains heavily dominated by the public sector, which accounts for more than 40 percent of all formal sector employment in the country. Slow growth in employment opportunities has not been sufficient to absorb labour leaving the rural sector as well as new graduates.

As such, the country’s overall unemployment has been persistently high over the past 15 years at over 20 percent with an unemployment rate of about 40 percent rate amongst the youth. Despite its upper middle income status, one third of the population lives under the international recognized poverty line of $2 per person per day, a level much higher than many countries of similar economic standing.

In efforts to bridge income inequalities between the formal and informal job market, and also to mitigate against labour exploitation, the country has established the national minimum wage under the Employment Act. The national minimum wage in Botswana is not comprehensive as it only covers specific sectors. The last revision for national minimum wage was done in 2017, however trade unions and other economic experts said the new minimum wage rate do not match living expenses and they have proposed a living wage than a minimum wage.

Unlike the national minimum wage, the living wage is a highly debatable concept between policymakers, economists, labour unions and businesses. Minimum wages are set by governments and can apply to the entire workforce or targeted towards certain sectors as it is the case in Botswana.

However the main impediment in the debate is that there is no universal method or standard used to determine the living wages. This is because the cost of living varies as per country, towns, villages, size of family, amongst other factors. This has since resulted in concerted efforts from the proponents of the living wages to engage in timely data collection surveys to get rough estimates of living costs across countries. Such information is then used to come up with models that reflect consumer behaviour per region.

Indeed Mabeo conceded that International Labour Organisation is helping Botswana government with the report focused on finding figures which could give a picture of what exactly was the problem when it came to minimum wage.

“It indicated that we do not have the statistics. One of the major challenges that they pointed out is that the report identified 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.

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