New minimum wage is responsive to cost of living says JCTR
The Jesuit Centre for Theological Reflection acknowledges the new minimum wage announcement by the Minister of Labour, Hon. Fackson Shamenda as it shows that the government is cognizant of the need for workers salaries and wages to keep up with the cost of living in the country.
JCTR says, “We are pleased that our constant appeal through the Basic Needs Basket, a tool that depicts the cost of living, is being heard by government, as what this new minimum wage announcement means to workers, is that they now have increased purchasing power to buy basic needs including food and non-food items and can lead a more humane and decent life”
Over the last year, the cost of living as depicted by JCTR’s Basic Needs Basket (BNB) has remained about Kwacha 2.9m with the most recent figure being Kwacha 3, 395,660 for the month of June 2012 for an average family size of five living in Lusaka. Furthermore, among some of the findings of the JCTR Satellite Homes research, a compliment to the BNB survey has been that low incomes and a high cost of living are having an adverse impact on people’s ability to make savings and access food daily with some households having to skip meals in order to stretch household income to the month end. The Satellite Homes Research conducted in high density townships typically Chainda, Chibolya, Chipata, Garden, Kalingalinga, Kanyama and Ng’ombe shows, the growing challenges of Zambians due to high costs of basic needs including food, accommodation, water and electricity.
According to JCTR, “Clearly when employers effect the new minimum wage, family incomes will increase and so will employee satisfaction. Small businesses and trader’s alike including tuntembas, are likely to have increased sales and profits based on turnover. The bigger shops will equally benefit and we remain hopeful that workers will take the effecting of the new minimum wage as a challenge to their productivity and contribution to the sustenance of their employers business.”
The JCTR wishes to acknowledge the pro-poor efforts of the Government in ensuring that Zambians, especially workers have better conditions of service and can lead more decent and humane lives. The raising of the minimum income tax threshold to K2, 000,000 relieves workers earning less than the Basic Needs Basket calculation, which is positive as the basket reflects what is typically obtaining in society. These salary increments and statutory guidance such as the new minimum wage will be meaningful to Zambians as people can readily purchase more goods. However in a free market economy, these efforts have the potential to push up prices of goods as businesses strive to re-coup profits that will now go towards paying workers salaries and may thus further inflation. Therefore, as per the intent of the BNB, the underlying issue is the cost of living which clearly warrants urgent and sustained policy steps in order to ensure prices remain affordable in the long run.
JCTR recommends that Government stretch its responsiveness by consistent recognition that Zambia is a free market economy and factors that contribute to the cost of production of goods and services largely determine the cost of living. Therefore, urgent attention is needed to control the cost of living from further rise by ensuring that the environment for business remains enabling for small businesses who are the majority of employers in the informal sector.
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