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The freeze on salary increases announced by the Reserve Bank Governor, Dr John Mangudya, has caused panic within both the public and private sectors.
It has been a tradition over the years for workers to expect a review of their salaries upwards every year. The economy unfortunately has not been performing to expectations hence some companies have been forced to either reduce working hours or retrench. Dr Mangudya said Zimbabweans should not expect salary increases this year because the economy cannot sustain them.
The central bank boss’ position was this week backed by Public Service, Labour and Social Welfare Minister Prisca Mupfumira who said workers will not be awarded any wage or salary increase this year because there is very little productivity. Minister Mupfumira said she totally agreed with Dr Mangudya that the country’s economy cannot sustain any salary increases this year.
Dr Mangudya and Minister Mupfumira are both agreed that the way forward is for industry to consider downward adjustment of prices in line with new policy measures adopted by the government. Minister Mupfumira said although the salary and wage freeze she announced applied to civil servants and workers employed by parastatals, the private sector was expected to follow the government’s lead.
She said the government was aware of the challenges faced by industry which included escalating rate of labour disputes, retrenchments and salary cuts. Minister Mupfumira said government was in a tight situation because its cake was getting smaller each passing day. She said given the prevailing conditions, it was important for the government and employers in the private sector to engage workers so that they appreciate the challenges facing the economy which has necessitated the freeze on salary increases.
Minister Mupfumira said government on its part had reactivated the Joint National Negotiating Council to engage its employees. She said government valued dispute resolution centred on dialogue in labour matters. Employers, Minister Mupfumira said, should not rush to retrench when there were many other options that could save jobs.
She said retrenchment should not be option number one because it has a cost factor. Minister Mupfumira said the focus should be on increasing productivity which at the moment is about 30 percent for most companies.
We cannot agree more with both Minister Mupfumira and Dr Mangudya that we need to balance the economy first and increase salaries later. It serves no purpose to increase salaries to unsustainable levels which will force companies either to retrench, reduce working hours or even close shop.
The issue of the national economy’s cost drivers, as observed by Dr Mangudya, should be addressed as a matter of urgency. These cost drivers include among others, municipal tariffs, environmental management fees and some non-tariff barriers.
Workers, as rightly pointed out by Minister Mupfumira, should be engaged so that they appreciate the challenges facing the economy. Workers on their part should change their work ethics so that they become more productive.
This business of hanging jackets in the offices the whole day should be a thing of the past if we are to turnaround this economy. It is only when the economy starts performing well that workers should expect a review of their salaries. We want at this juncture to implore workers to focus on increasing productivity to improve their respective companies’ capacity to pay better salaries.
Online Reporter