Wednesday, April 24, 2024

The proposed P3000 minimum wage suggested by UDC warrants a through public scrutiny and debate

The Umbrella for Democratic Change manifesto has come up with a key suggestion that needs isolating for further diagnosis and scrutiny.

That proposal is an introduction of P3000 minimum wage.

At face value it might sound like an innocuous proposal made in the heat of heightened political theatrics.

But that is not so.

A P3000 minimum wage is a serious undertaking, with a real potential to collapse an economy.

The UDC must be honest with how the figure was reached. And more importantly what was it based on.

Botswana’s economy is no longer what it used to be.

It is slowing towards stagnation if not a total halt.

Recession is never too far away.

Public borrowing has never been higher.

And the IMF has warned about the oversized government wage bill.

At a time when the tightening of the fiscus is most desirable, the UDC seems to be calling for its loosening.

Everybody wants money. And everybody would love to have a raiser, because that is basically it for those earning below P3000.

But the economics of bread-and-circus suggested by UDC should have a chilling effect on everybody.

More shocking is the fact that the UDC has not bothered to say where and how the minimum wage will be financed, much less how P3000 was arrived at.

Is it a result of economic projections? Or it’s a figure calculated based on the existing economic data?

Yet more worrying is the fact that the UDC itself does not seem to fully grasp the gravity and far reaching consequence of what they are saying, especially if they were to win sate power.

The UDC, tragically is conveniently choosing not to say what will be the implications on overall employment and or unemployment as a result of the P3000 minimum wage.

Wantonly throwing about such figures can be risky, reckless and even counterproductive.

It could undermine political discourse as well as kill the already floundering public trust in politics and politicians.

If it is found that UDC deliberately flaunted false data to win political mileage, it would amount to a new low in our politics that would ordinarily induce a price to be paid by the UDC itself.

As is the case everywhere, there should be consequences.

Any minimum wage, especially the one as substantial as that suggested by UDC should as a matter of fact be accompanied by a similar increase in productivity and or reduction in regulatory bottlenecks as part of the matrix.

Plugging a number off the trees and banding it about is not exactly economics.

Rather it seems somewhat casual, outlandish and contrived.

But the problem is that this proposal, if implemented will have serious negative repercussions.

It might be that the UDC has calculated that for it to change the balance of power they needed to dangle a carrot.

But productivity is today one of Botswana’s biggest problems.

Botswana will never realize its full potential unless there is a marked shift in favour of enhanced productivity.

Unbeknown to them, or as it is, perhaps deliberately, the UDC might be fomenting an unmanageable economic disruption that might be impossible for anyone of them to deal with.

The biggest fear is that a P3000 minimum wage might be unsustainable.

It is not yet clear that UDC know where their proposal might carry everybody else.

No doubt there will be a massive shock to the economy, resulting in widespread job losses and uncertainty.

Such disruptions, as a price of political expediency are totally unnecessary.

Another possible threat to the economy is the loss of stability.

Political leaders have a responsibility to be resolute, but also cautious at the same time.

The UDC sunny outlook will with time become a hostage of reality.


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