Published by the government of Zimbabwe
Ashwert Kugara
19 February 2008
Harare — Despite the recent price hike of basic goods being a stimulant in making businesses viable, the plan has wiped out individuals' incomes and worsened poverty amongst the poor.
Analysts and labour bodies this week expressed grave concern over the depletion of the general standard of living owing to disparities between commodity prices and salaries. Economists believe that the failure to strike a balance between wages and price increases has a detrimental effect on the economy.
They said the status quo had given rise to skills flights from the formal market to the informal market, where people are realising more gains by working for themselves than other people.
A human resource consultant said the current state of affairs has left employees facing difficulties that have made it impossible for them to concentrate at work.
An official with National Employment Council (NEC) for the construction industry said that lack of monitoring mechanisms to reign in on overcharging businesses was a disadvantage to workers as it had impacted negatively on collective bargaining.
He said escalating prices were quickly eroding thresholds agreed to under the collective bargaining process.
"Basically, wages will never meet price increase as we sit once per month for wage review during which prices can even increase more than five times," he said. Collective bargaining is recognised as a fundamental tool through which economic stability is maintained.
Since the beginning of the year, the National Incomes and Pricing Commission has increased prices of basic commodities by over 2 000 percent while salaries remained stagnant. Although official figures are yet to be published, the country's poverty datum line is estimated at over $300 million while the minimum wage is still floating at $35 million.
Presently, most workers are earning salaries less than $100 million at the back of inflation staggering at 66 000 percent as at December 2007.
It is no secret that successful economies are steered by a fine-tuned human resource base, a renowned fundamental aspect for economic growth. The social contract was initially premised on the need to move incomes to levels within the PDL, stop unwarranted price increases and to increase company production. Most firms are losing skilled labour owing to "unattractive" remuneration.
The appointment of the NIPC, greeted with much jubilation by the public, has to date not made an impact in taming skyrocketing of prices and balancing that with incomes. Government, business and labour on June 1 last year signed three protocols including the National Incomes and Pricing Commission, in a landmark demonstration of unity of purpose in stabilising the economy.
However, labour still occupies a backseat role in the social contract dialogue while Government and the business sector are yet to reach an agreement. Furthermore, most NECs and employers in various sectors have since last month reached a deadlock in their quest to solve wage disputes.
The Rural District Councils Workers' Union was in January demanding that the lowest paid worker should earn $329 million per month.
Zimbabwe Federation of Trade Union secretary-general Mr David Danda has lobbied Government to stop taxing housing and transport allowances in order to salvage the sinking incomes.
Zimbabwe is among other economies in the region that had been hard hit by mass exodus of skilled personnel in search of "greener pastures" abroad. This tends to retard economic growth at home.
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