adminEMPLOYERS Confederation of Zimbabwe (Emcoz) president Mr Jack Murehwa believes that stakeholders need to work towards a moratorium on salary and wage increases.
While Emcoz is prepared to support the proposal made by RBZ Governor Dr John Mangudya, labour has become anxious.
The central bank opines that the cycle of both salary and price increases is now making locally-produced goods uncompetetive.
“For a long time now, our country has been operating under the illusion that the employer owes the employee a living, even if the business is on its knees and on the verge of shutting down.
“In his (Monetary Policy) Statement, the Governor, from his macro-view of our economy, is sharing, from his technical know-how, an honest opinion that the national economy cannot afford a salary increase.
“It is important to note, however, that the Governor is expressing his opinion based on his observation of the performance of the national economy and he is not prescribing for individual enterprises,” said Mr Murehwa. He said it was foolhardy to continue thinking that salaries and wages can continue to increase, even when revenues and profit margins are shrinking.
“If we do, we will be confirming the classic definition of insanity – continuing to do the same thing over and over again but expecting a different result.
“On the part of the employees, we believe that adopting this pragmatism, which we now openly discuss, will assist in ensuring that at least the existing jobs are secured and their standard of living, at least for those who stay in employment, will be sustained by a more competitive economy which keeps the prices of goods and commodities low. . .
“Emcoz shares the observation that the economy and consumers would benefit more from a price reduction than from increasing wages and salaries.
“Lower prices induce more demand through the concept of price elasticity of demand which is good for both consumers and businesses as it leads to the re-balancing of the economy.
“Emcoz believes that if we can at least arrest the escalation of costs, production efficiencies will improve and reduction of prices becomes logical leading to increased volumes and therefore revenues.
“All social partners therefore stand to benefit from arresting increases in costs,” said Mr Murehwa.
Online Reporter