The president is right on minimum wage

By Anthony Masake

There has been growing debate about the thorny issue of minimum wage in Uganda and President Museveni simply added more firewood in the fire on Labour Day when he argued that this was not a priority at the moment and that the Government is focused on lowering costs of doing business to attract more investors yet such a law would scare them away.

This was coming on the backdrop of Speaker Rebecca Kadaga granting MP Arinaitwe Rwakajara leave to go and draft the Minimum Wage Bill on February 21, 2013. According to the draft Bill, the proposed figure is sh250,000 per month.

There have been strong opinions from both sides of the debate. Advocates such as Martin Luther King, Franklin D. Roosevelt and many others have in the past seriously advocated for minimum wage across the world. On the other side of the argument, William B. Aumol and Alan Blinder contend that “The primary consequence of the minimum wage law is not an increase in the incomes of the least skilled workers but a restriction of their employment opportunities”. Others have argued that a minimum wage law is just one of those ways of government contemptuously controlling its citizens actions and muzzling their ability to choose.

While President Museveni was busy challenging the minimum wage crusade, across in the neghbouring Kenya, President Uhuru Kenyatta was announcing an increment of the national minimum wage by 14% to the ululation of the crowd gathered at Uhuru Park. Shortly before the president announced this increment, the Deputy President William Samoei Ruto had just emphasised the need to improve working conditions of Kenya’s labour force, fighting inflation and exploring innovative ways of reducing the costs of living, curtailing escalating food prices which had become volatile and was accounting for over 40% of a person’s incomes, improving free medical services to relieve the pressure on peoples incomes whilst ensuring a healthy work force, and such other interventions.

The rationale of the interventions is that rather than setting a minimum wage, which leads to an almost automatic rise in prices, which would inevitably stagnate a person’s purchasing power regardless of the earning, these mechanisms would lower the costs of living which would benefit all citizens alike and raise purchasing power when prices drop further.

A minimum wage law in Uganda would ensure that employers pay employees higher wages for those who were earning below the set wage. On the other side of the coin, economists have argued that minimum wage law would cost the economy thousands of jobs, raise prices of final products/services, volunteerism/internship/part-time workers etc will have their opportunities seriously limited, low-paying jobs which are an entry point for most workers would cease, small scale businesses would easily be pushed out of business which means loss of jobs, businesses would fail to achieve greater efficiency, unprecedented lay-off of workers in the interim, and provide an extra incentive for businesses to mechanise and outsource activities previously performed by humans on full time basis to cut costs hence unemployment.

A straightforward analysis of Uganda’s work force challenges reveals serious glaring issues that ought to be addressed before we consider minimum wage.

Serious issues such as lack of appointment letters/contracts, sexual and other forms of exploitation at work place, medical cover, protective wears, delayed/irregular payments of wages, regulating termination of all workers, non-payment of work benefits, observing and respecting annual/maternity and other forms of leave, growth of labour unions etc must be addressed first. Upholding and respecting these major rights of Uganda’s workers ought to be a priority.

In addition, chronic challenges of absenteeism, poor attitude at work, low productivity, corruption/bribery etc deserve attention. If I may add, these do not have any obvious relation with pay.

What we need now is to raise our productivity and develop better skills to automatically attract higher pay and demand for establishment of a salary’s commission to check the disparities.

Mr. Masake is a Human Rights Defender

mskmas@yahoo.co.uk

Twitter: @masakeonline