The Centre for Social Concern (CfSC) has asked Treasury to consider effecting another minimum wage hike as a way of cushioning low-paid workers from the impact of the Covid-10 pandemic.
In its analysis of the 2021/22 National Budget proposal, the centre argues that Treasury’s move to increase the minimum wage to K50 000 in the 2020/21 financial year, which was effected in January 2021, did not help to improve the standard of living of low paid Malawians.
In an interview with Business News on Thursday, CfSC economic governance officer Benard Mphepo observed that at the time of implementing the minimum wage hike in July 2020, the cost of living was K164 316 but it increased to K214 914 in January 2021.
He said: “While government was applauded by an increase in minimum wage, it is sad to note that the increase in minimum wage did not help to improve the standard of living of poor low paid Malawians.
“This, therefore, necessitates another proposal of increase in minimum wage in this forthcoming budget despite the impact of covid-19 pandemic.”
Mphepo said the current minimum wage of K50 000 is not adequate to support employed Malawians to move out of poverty.
“An increase in minimum wage is one of the initiatives that government must implement to bail Malawians out of poverty.”
Meanwhile, rising food prices have continued to push up inflation with the first quarter headline inflation averaging 8.4 percent, 0.3 percentage points shy of the 3.1 percent that Reserve Bank of Malawi (RBM) had earlier projected for the period.
The rising inflation has been exacerbated anite by the weakening of the Malawi kwacha against the US dollar and rising fuel prices, which averaged 28 percent on December 16 2020 and 11 percent on March 9 2021.
Consumers Association of Malawi executive director John Kapito said earlier that consumers should brace for tough times ahead as the kwacha continues to weaken amid rising global fuel prices.
He said:” Our surveys have revealed that most of the high food prices have been triggered by the high transport costs.”