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The two faces of the minimum wage ‘war’

By Vision Reporter

Added 21st November 2010 03:00 AM

MANY countries set a minimum wage, which gives a mandatory lowest amount of money below which an employee should not be paid. In Uganda there have protracted debates on whether or not to have a minimum wage.

MANY countries set a minimum wage, which gives a mandatory lowest amount of money below which an employee should not be paid. In Uganda there have protracted debates on whether or not to have a minimum wage.

By John Odyek
MANY countries set a minimum wage, which gives a mandatory lowest amount of money below which an employee should not be paid. In Uganda there have protracted debates on whether or not to have a minimum wage.

Chairman National Organisation of Trade Unions Wilson Owere wants a minimum wage which is set up on a sector by sector basis. He said stakeholders from different sectors should be selected to make proposals on the minimum wages for their sectors.

He cited Kenya where a minimum wage is set up on a sector basis. Such sectors include construction, farms and industries.

Owere said consideration should be made on whether a sector was located in rural or urban setting. “The minimum wage helps people to get out of poverty.

If you earn below US$1 per day you are considered to be below the poverty line. It will improve industrial relations. It will give confidence to workers and protect work, it will improve productivity,” he said.

He said the minimum wage would enable workers earn money that they can use for their transport, housing, shelter and money to take home.

He argued Uganda was a member of the East African Community and it was necessary to have a minimum wage to compare with other countries in the community.

Rosemary Ssenabulya Executive secretary Federation of Uganda Employers Association agreed that a minimum should not be uniform. ‘It should be employers, representatives of workers to agree on minimum wage,” she noted.

Ssenabulya said the minimum wage can help in determining a premium for a health insurance scheme and NSSF contributions.

“It helps to remunerate the lowest wage earner so he or she gets a reasonable pay,” she said. She cautioned that if the wage was set by government without the consultation of employers it could affect the financial positions of companies.

She argued that some employers were sensitive to the pay of workers and so with without a minimum wage they set a fair wage for workers.

She said a minimum wage of sh63,000 had been proposed but it has not been approved by the President Yoweri Museveni. Workers MP Dr Sam Lyomoki said the minimum wage was necessary.

“It is too late for workers. We have been pushing it for the last 15 years. In 1999 Parliament was urging President to push for minimum wage. The president has delayed to approve a minimum wage,” Lyomoki remarked.

Lyomoki argued that the President Museveni was given wrong impression by Western governments and donors that a minimum wage shouldn’t be fixed because of liberalization and that market forces would fix the wages.

He said a minimum wage protects unskilled people from exploitation by unscrupulous employers.

He warned that a minimum wage which was set too high can lead to unemployment and can lead to companies to collapse and if it is set too low, workers are exploited. He said a balance has to be found.

He attacked some big construction companies which pay workers sh2,000 per day instead of at least sh10,000. “A minimum wage improves motivation and productivity,” he said.

He said current Minimum Wages and Council Board Act 1964 spells that it is the head of state to approve a minimum wage. He said Act provides for a minimum wage of sh60 per month and therefore it is outdates.

He said in 1998 a minimum wage of sh75,000 was proposed by Parliament but reduced to sh65,000 and then sh63,000 but has not been approved by the President.

The International Labour Organisation (ILO) notes that a minimum wage in Africa is a blunt instrument that may not confront economic insecurity.

It wants governments to improve the social security sector and possibly provide for a social security grant for the impoverished citizens.

The two faces of the minimum wage ‘war’

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