1 May 2014

Mozambique: Handouts for Parliament Members, Pittance for the People


Every year, Mozambican workers have faced resistance from social partners (the government and the local entrepreneur) in adjusting minimum wage to meet the monthly expenses for standard family in Mozambique (five people).

This year, as always, nothing changed: the approved minimum wage remains too low.

Still, the Mozambican State does not properly measure efforts and gives leaders, judges and parliament members the prerogative to use and abuse public money.

For example, in an unprecedented furor Parliament rushed to pass a bizarre proposal, drawn up by its own lawmakers, which ensures their own lifetime of comfort.

Last Tuesday, April 29th the table of minimum wages for the current year of 2014 was disclosed. As always, the moment long awaited by Mozambican workers did not bring good news.

On the contrary, the announcement made sure that workers will continue to cut corners in order to adjust their household budget to pay for consumer goods, school supplies, transportation and water and electricity bills.

This is all because the national minimum wage, set at the last Social Consultation, sags around 2,800 to 7,500 meticais ($89 to $239) a month.

This is out of approximately 9,000 meticais, a value proposed by the Mozambican Workers Organization - Trade Union (OTM-CS). Put differently, the increase ranges from 200 to 600 meticais.

The table approved this week by the Council of Ministries shows that the lowest salary is the sub-sector of fishing with an increase of 212.00 meticais, passing the minimum wage to now be 2, 857 meticais ($91).

The sector of financial services activities in the sub-sector of banks and insurance companies increased 9.5 percent, passing the minimum wage to be 7,465 meticais ($238).

In the same sector, microfinance, micro-insurance and other activities auxiliary to financial intermediation, the increase is of 6.21 percent or 423.68 meticais, increasing the minimum wage to 7,241 meticais ($230).

Skinny household budgets

Despite the adjustments, minimum wages still do not cover the monthly necessities for the sustenance of a standard household consisting of five people.

Be it said that since its establishment there is no record of that the basic salary covered, even at one point in time, at least half of the needs of Mozambican workers.

Even with annual increases, the wage bump has no effect on the household budget, as the purchasing power of consumers has been getting worse.

The basic family budget was designed for setting the national minimum wage and consists of rice, sugar, corn flour, bread, peanut butter, beans, vegetable oil, fish and fruit.

The minimum wage has never been enough to cover these needs.

According to the OTM-CS calculations, the cost of monthly expenses to feed a household composed of at least five people, not including hygiene expenses, red meat and entertainment, is estimated at more than 8,000 meticais ($255).

@Verdade went to the main markets and commercial establishments in Nampula City and found that food prices, particularly rice, corn flour, wheat, tomatoes, onions, fish, oil and potatoes have been suffering a significant increase, varying between 20 and 30 percent.

For example, a kilo of rice is marketed to a value that fluctuates between 29 and 30 meticais ($0.93 and $0.96). The 10-kilo bag of potatoes is sold at 250 meticais ($8). The kilogram of tomatoes costs 50 meticais ($1.60).

A month ago, at the central market, the cost to feed a family of five loomed at 9,000 meticais ($287). In the markets of Resta, 25 de Junho (Matadouro), Memória and Pinto Soares (Faina) the cost ranged from 8,000 to 10,000 meticais ($255 to $318).

At present, in those places where the majority of Nampula inhabitants get food, the basic family sustenance budget is around 10,000 meticais, in some cases reaching the 12,500 meticais ($318 to $398).

It should be noted that the list and quantity of products that make up the household sustenance budget remain the same, despite the fact that, since its establishment, the national minimum wage has gone through multiple changes.

Weak negotiating power of the trade unionists

Every year history repeats itself: the Worker - Trade Union prepares itself to win the battle of adjusting the minimum wage for Mozambicans.

However, the organization is up against the power of the national government and the business community who believe that the increase demanded by unionists can take the national economy off its tracks.

The results of the negotiations concerning minimum wage by job sector are still short of meeting the basic needs of ordinary Mozambicans.

On the other hand, consumer purchasing power has been decreasing. Recent data from the National Institute of Statistics (INE) shows that the country is still experiencing an escalation of food prices.

According to some economists, this fact is due to the fixture system of the base value of minimum wage and, above all, the weak negotiating power of trade unions.

In 2013, the Mozambican economy posted a robust growth of about 7.1 percent (one of the largest in Sub-Saharan Africa), moderate inflation of 4.2 percent and a fiscal performance that surpassed the targets set, influenced by the collection of capital gains in the natural resources sector.

These are the main indicators used in fixing the minimum wage.

Despite these encouraging results, the OTM-CS failed to convince social partners that Mozambican workers and their families need to live a life of simple dignity in order to catch up to the country's progress, clearly demonstrating that unionists need to further develop their negotiating capacities.

Handouts for leaders

While unionists are fighting to see the minimum wage be adjusted to the family sustenance budget which valued at 8,000 meticais, the Mozambican government pays millionaire wages to judges, parliament members and to public managers. In the public sector, for example, teachers, police officers and the health professionals (doctors, nurses and orderlies) earn the lowest wages.

The same government that claims to have no ability to improve workers' salaries paid big bucks to pensioned Mozambican leaders.

The State paid out some of them 2,382,229.72 meticais per month ($75,985.65) and 28,586,756.64 meticais ($911,827.75) per year. In other words, select individuals receive, at minimum, more than 27 minimum wages combined.

As if that wasn't enough, in the light of their new Statute, passed by consensus by Parliament, they benefit from a set of rights and benefits.

In addition, they are entitled to, among other things, a car, expense account, and rent allowance.

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