Although Zimbabwe is not classified as a least developed country, it is a low income country where 80 percent of the adult population earn less than $200 per month, including 17.3 percent who do not have any income. Given that the consumer basket, currently at about $500, is more than twice the majority wage, one wonders how anyone survives. Assuming that workers have to stay at consumption levels reflected by the consumer basket, it implies that they have to either sell some of their assets or borrow.
According to the Finscope consumer survey, 36 percent of Zimbabweans had to skip a meal because of lack of money or food and 34 percent had to go without medical treatment. Thirty-six percent had not been able to send their children to school and 61 percent had gone without cash at some stage and had to make plan for daily needs. The final nail is that 31 percent of Zimbabweans do not save, which proves that most are surviving from borrowing to supplement their little wages.
Borrowing from the future to supplement current consumption has its own dangers. It might result in vicious cycle of poverty, where the children will inherit a debt from their parents and they in turn have to borrow to settle it. Without savings there is no investment taking place and this has a bearing on economic growth.
Some workers are actually selling some of their personal assets to meet their living costs.
The imbalance between the consumer basket and the average wage has seen the integrity and morality of workers being put to the test. Corruption continues to wreak havoc and the media is full of stories of theft and bribery in the workplace.
The situation is catastrophic and something needs to be done urgently. This can take place it two ways; by either dealing with what workers earn, or looking at what they buy – that is reconciling wages with the consumer basket.
Wages can be increased in a smarter way to ensure that we avoid increased inflation, by linking the marginal increase to productivity. Dealing with what workers buy involves putting measures in place to ensure that goods are produced and distributed efficiently and sold competitively.
On the policy front, the Government has pledged, in the industrial policy, to change the labour legislation to reflect the prevailing economic environment and adapt wages to the new economic patterns. Further, the Government has pledged to expedite the review of both labour laws and the related institutional arrangements, with a view to bring flexibility to the labour market. Employers in turn would be compelled to create employment conditions that recognize and respect the condition of labour as well as provide rewards which are commensurate with performance and productivity. It is hoped that this will enhance the welfare of the workers.Post published in: Opinions & Analysis