If you read economics with the seriousness of a dreamer, all countries will, at some stage, be the same. Their level of development will be equal and differences among them quite negligible. If that moment comes, it means all of us will be in a position to go on a holiday anywhere on the planet. Our quality of life will be no different from any developed nation of the world. Similarly, the wage structure will be at par with all other countries.
Readers call it “neo-classical convergence” of some kind. For instance, as Asian countries have been developing, most western countries have found it difficult to maintain labour intensive industries such as textiles. They have simply shifted them to Asia where wages are lower than the West. Once Asia gets at the same level with the West maybe they will shift somewhere. I cannot tell where, but some of the businesses from the West are heading back home. Maybe the idea of lower wages does not hold. Neither should one take the eventual convergence at face value. It could be an exercise for the classroom or some religious enterprise of Judgement Day, where all of us are equal. You cannot speculate.
But talking of wages, whether they are equal or not, I am tempted, like I do many times, to reflect on the incorrectness of the minimum wage. The liberal mind, often influenced by the capitalist machine always reckons there should be no control on wages. Wages are a cost, the argument goes.
Private businesses have successfully infiltrated the minimum wage setting mechanism. Their lobbying has been perfect often grounded in the fact that they create jobs. The threat or the bargaining chip is usually that once minimum wages are quite high, it may lead to job losses. Authorities, trade unions and other employer organisations are tactfully hoodwinked in the craft of lobbying.
Yet, if you start crunching the numbers, a pattern emerges. The biggest employer, government pays above its own minimum wage, even though salaries of the lowest paid civil servants are not decent enough. But the situation is very different from the private sector irrespective of different categories.
I find something ironic to be honest. The entire private sector or its majority thrives on government contracts to survive. Government is essentially bankrolling it from food supplies, office equipment, stationery, security, pharmaceutical products and many other services.
Elements of deliberate overcharging are well documented and yet the private sector has not worn a moral face to pay a decent living wage.
A new minimum wage of K687 has just been announced. This, as of today, is $1.10, not sure what it will be by the end of next week. It is a poverty wage that should not be paid to anyone, skilled or unskilled if businesses indeed consider themselves partners of government in fighting poverty. No one should be celebrating this rise because the taxpayer is already bankrolling the private sector through procurement deals. Why should a tax evader even claim to follow the law on minimum wages?
Wanton profiteering should in no way override the conscious of paying decent wages. The evidence is there for all of us to see. Incidents of dishonest employees are not always a product of criminal minds but something else. In particular, employees getting poverty wages in a workplace full of opulence are amenable to temptations of some kind. While the reaction is to brand every unskilled labour dishonest with dismissals or indecent measures such as body searching, the reality is people are not paid enough and will try every trick to simply survive or make ends meet.
A daily wage of K687 kwacha’s is not ‘livable’ and the private sector have got their profits secured on this one. The rate of inflation is over 20 percent and the instability of the kwacha just adds to the folly of unfairness in how we determine the minimum wage. Would the private sector come clean on how many jobs have been lost whenever minimum wages have been raised?
Maybe the whole process of setting minimum wages must be reviewed and become a sole responsibility of government and trade unions. The private sector can simply urge their members to pay their share of taxes to ensure they have safe coffers to offer services to the people they underpay through the tacit of clever lobbying.