MCTU, Ecam tussle over living wage

The Malawi Congress of Trade Union (MCTU) says it will advocate for the transformation from minimum wage to living wage if workers are to thrive in the harsh economic environment.

MCTU argues that while there are many other factors that affect workers’ well-being, those earning a living wage are better off and are able to plan for emergencies, save towards future projects or gain access to loans, participate in social events and create a better future for their families.

But Employers Consultative Association of Malawi (Ecam) argue that Malawi is not yet ready for a living wage owing to the adverse economic conditions.

MCTU President Luther Mambala said in an interview on Tuesday that while the union has been advocating for improved minimum wages, a living wage would be ideal as it would help families afford basic necessities.

Malawi is also one of the world’s poorest countries with 62 percent of Malawians living below the World Bank’s extreme poverty line and about half of all children lacking adequate nutrition.

With a minimum wage of K687.30 a day and a monthly cost of living of K171 996 as for November 2016, Mambala said many households have been left vulnerable and discussions to increase the minimum wage are still ongoing.

Said Mambala: “Those with a lower level of income such as a minimum wage that does not adequately cover living costs may not be able to meet their families’ needs. With limited or no savings, they are less resilient in emergencies, and may struggle to participate in social activities without incurring debts.

“Furthermore, by supporting decent, regular and fairly paid employment, businesses contribute to sustainable economic development in production countries, thereby helping to foster the stable conditions needed to continue effective trading relationships.

The new MCTU president said we want families to “manage to eat and take care of themselves with a living wage.”

“While we understand that the economy is not in good shape, in other countries they use living wage that can sustain somebody probably for the whole month. And this is what we will strive for,” he explained.

In a separate interview, ECAM president Beyani Munthali said Malawi is not yet at a stage where  a living wage can be sustained owing to the problems that need to be addressed in as far as productivity, unemployment, underemployment and the economy are concerned.

“There is no hand to mouth in Malawi. Employers pay what they can afford, what the business can afford, but taking into great consideration the welfare of the worker. It is not easy. We understand the cost of living has gone up, but so too has the cost of doing business. These two must balance each other.

The minimum wage reduces poverty, inequality, boosts morale and facilitates efficiency in businesses. What we should be doing is coming to an agreed minimum wage that can facilitate the above not a living wage that will kill business,” he said.

However, in the tea sector, workers earn a living wage and are thriving, thanks to efforts of the Malawi Tea 2020 coalition.

Based on an on-the-ground assessment of progress on wages in October 2016, the coalition found that basic wages were 33 percent of the living wage on average from January 2014 until September 2015 when the Malawi Tea 2020 programme started, compared to an average of 40 percent from September 2015 to October 2016, indicating a considerable increase in wages and narrowing of the gap between the living wage and tea sector wages.

This improvement has been welcomed by many in the sector as it means approximately 50 000 tea pluckers who were trapped in poverty will be able to afford to live a better life.

Currently, about 74 percent of the Malawian population still live below the income poverty line of $1.25 (about K750) a day and 90 percent below the $2 (K1 500) a day threshold, according to the United Nations Development Programme’s Human Development Report.

Yet monthly review of prices of food and non-food basket as calculated by the Centre for Social Concern (CfSC) indicates that on average a household living in the cities requires about K171 996 as for November 2016.

Ministry of Labour, Sports, Youth and Manpower Development spokesperson Symon Mbvundula said that while it is legally correct as stipulated in the Labour Relations Act to demand such from their employers, there is need for both parties to negotiate.

“What they are supposed to do is to engage the employers and negotiate if they feel the minimum wage is too minimal and people are barely surviving. This is legally correct because their mandate is to ensure that the welfare of workers is well taken care of. The fact that we have minimum wage does not bar employees to negotiate for better perks and the bargaining forum is trade unions and not individuals,” he said. n