Malawi Congress of Trade Union (MCTU) says the revised minimum wage of K35 000 offers no hope as workers will fail to meet basic needs.
MCTU secretary general Denis Kalekeni told Business News that the rate doesn’t make economic sense as the cost of living, recorded at K196 450 as at June 2019, has also gone up, hence their minimum wage proposition of K45 000.
Said Kalekeni: “K35 000 is completely nothing for workers to meet basic needs because cost of living has gone up. This rate does not give minimum wage earners a chance to manage their livelihood. But we understand that the general minimum wage could cost jobs for most domestic workers hence; going forward, we have agreed to move to sectoral wages where each sector should have its own minimum wage depending on the capacity.
“We are also aware that some of the factors making life to be tough as a worker are coming from levies and essential services. Our proposal, therefore, is to have some of these levies on water, electricity and fuel reduced and that our hospitals are provided with all drugs to ease pressure on the minimum wage earners.”
He, however, expressed excitement with the increased tax-free band, which he said provides relief to low income earners.
In his 2019/20 National Budget presentation on Monday, Minister of Finance, Economic Planning and Development Joseph Mwanamvekha said on account of the sky-rocketing cost of living biting many average Malawians, Treasury has adjusted upwards the pay as you earn (Paye) tax-free bracket by K10 000 from K35 000 to K45 000.
He also said Treasury has increased the minimum wage from K25 012 per month to K35 000. This adjustment, the minister said, will help protect lowly-paid workers and improve their welfare.
The wage hike comes three years after Treasury last increased the minimum wage by 24 percent from K19 000 to K25 000 a month, a development which was contrary to MCTU’s earlier proposal of 58 percent (K33 000) wage hike.
In the last financial year, Treasury also raised the tax-free band from K30 000 to K35 000 per month, in order to improve the disposable income of taxable salaried persons.
Consumers Association of Malawi (Cama) executive director John Kapito said the ideal minimum wage could have been K75 000.
“Having a raise of this size has also given us hope that government has been listening to our lobbying and we hope soon, we will be able to get to the right amount. We were aware that we will not get everything we had asked for at once but at least the low paid worker will have a smile on his or her face. We have also noted that the tax band has been increased definitely, this will give some relief to the low-income earners,” he said.
Catholic University dean of social sciences Gilbert Kachamba observed on Tuesday that the move is positive as it will allow for increased disposable income.