The Employers Consultative Association of Malawi (Ecam)says the recent hike in the minimum wage will make employers dig deeper into their pockets and put some jobs at risk if the economy is not revamped as projected by the Minister of Finance, Economic Planning and Development Goodall Gondwe.
Ecam executive director Beyani Munthali said in an interview yesterday that while the hike will help to effect capacity of some employers and increased productivity, the burden will be pushed on their employers who are also struggling.
“The minimum wage is being increased from K687 per day to K962 per day. This will affect the capacity of some employers, while for some, it will be a matter of planning. We hope this will result in increased productivity from workers.
“It is a requirement by law that the minimum wage must be adjusted at least once every three years. So, employers will have to comply. This means that consumers should also expect a rise in the cost of goods and services,” he said.
Munthali, however, observed that employers will have to dig deeper and in most cases push the burden on their customers who are also struggling.
“If the economy isn’t revamped as projected by the Finance Minister then yes we might face a situation where some jobs are lost which is not the desirable result,” he said.
Gondwe told Parliament a fortnight ago during the 2017/18 National Budget presentation that following the minimum wage adjustment, an appropriate Bill will be presented to the House for consideration and approval.
The minimum wage was last raised upwards on October 1 2015 from K551 to K678.76 per day, which is about K18 000 or about $25.
In a position paper prepared by Malawi Congress of Trade Union, (MCTU), the union argued that due to the prevailing economic situation, K678.76 was not enough to earn a living considering the current inflation rate, which stood at 21.2 percent as of August 2016 saying a 58 percent wage hike would do.
Recent statistics from the Centre for Social Concern (CfSC) show that in terms of the basic needs basket, on average, a family living in the city requires about K163 286 as of April 2017.
In a separate interview on Saturday, MCTU president Luther Mambala said the union will continue engage government on the minimum pay hike as it was earlier proposed at 58 percent.
“On the other hand, we are happy; but not very happy but we can still have a breath on this. But it’s not much looking at the economic situation of our country and we also appreciate the hardships of our employers.
“We believe in give and take and this is why we have accepted the offer but we will still pressurise on the minimum wage to get better,” he said.
In an earlier interview, Catholic University head of economics department Gilbert Kachamba said the revision is long overdue considering the current economic environment, adding workers need to be paid not less than K2 000 per day.