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Golden Sibanda Harare Bureau
Employment councils are incorrectly using the poverty datum line for a family instead of the PDL figure for a single person when lobbying for minimum wages for workers.
Reserve Bank divisional chief for economic research and policy enhancement Simon Nyarota said this yesterday while addressing Confederation of Zimbabwe Industries annual general meeting.
“It ($540) is the PDL for a family of six. If you look at any family you can be rest assured that two or three people are employed. We should look at the PDL for a single person,” he said.
Nyarota said the Zimbabwe National Statistical Agency calculated PDL figures for both the family and individuals, with the latter being the right figure to calculate minimum wages.
The RBZ divisional chief was responding to a question from United Refineries chief executive Busisa Moyo on how companies could keep staff costs within balance when NECs justified demands for higher wages citing the PDL.
Nyarota pointed out that a critical analysis would therefore reveal that most families in the country earned well above the PDL income level for a family of six people of $540.
This comes amid shrill calls from industry for government to amend the country’s labour laws, which make it expensive for struggling companies that want to rationalise costs, which are weighing down viability of firms.
Asymmetry between the need to rationalise staff costs and requirements of the law was identified by delegates who attended the CZI AGM as one of the structural bottlenecks that government needed to address to save industry from collapse.
Cabinet resolved in March this year to review the Labour Act to address, among other things, the situation whereby staff constituted up to 70 percent of the cost of doing business.
Finance Minister Patrick Chinamasa said then that after a systematic and thorough examination of the malaise in the public sector, government saw the need to review labour regulations.
Zimbabwe is generally regarded as having some of the most burdening employment costs in the region, yet industrial capacity utilisation has fallen drastically, from 54 percent in 2011 to 39,6 percent in 2013 as the economy slowed down.
The high remuneration costs add to a myriad of other constraints companies are facing that include high cost of power, electricity, water and raw materials among other things.
derick.khumalo