Ugandans yearn for minimum wage, but . . .

By Samuel Sanya

As the intensity of the mid-day sun reaches his face, beads of sweat start to form on his forehead. David, an operations manager with a catering company seems unfazed, he looks on as teams of workers set the tables at an end of year party.
 
He stutters a little bit when asked about his salary and finally says: "Kampala is a tricky place depending on what kind of job you do. I get by on my salary, but life is a hustle."
 
Dressed in well-pressed clothes, dark sun glasses, David says he wishes for a monthly wage of sh4m though his real wage is far lower. 
 
A survey by Mywage.org shows that catering managers in Uganda with 5 years' experience work 52 hours a week and earn between sh1.3m and sh0.5m every year, with an average sh0.65m from which they pay for food, rent, health care, transportation and other costs.
 
For Nicholas Olupot a Social Studies Teacher at Bishop School Mukono West primary school, his wage situation is a lot grayer. The tall, lean, Director of Studies (D.O.S) comes into office at 6:00 a.m to monitor the arrival of pupils and teachers, before he teaches in primary six.
 
He conducts a sports session at 3:30 pm and then returns in the evening to supervise evening reading sessions for the pupils in the boarding section and retires to his home at 9:00 p.m, in a shared colonial style two room house, with rusty brown iron sheets, iron walls and peeling cream paint.
 
When he joined this school in 2010, his monthly salary was a mere sh280,000. Over the past three years, it has slightly increased to sh. 350,000. Considering that he has four children to take care of, Olupot finds it hard to make do with such a meager salary.
 
"You just cannot survive on this," he says. To supplement his meager salary, Olupot has teamed up with fellow teachers to form Savings and Credit scheme where each of the members contribute sh140,000 from their salaries at the end of every month. 
 
​The survey also reveals that sales executives earn a measly sh148,000 per month on average, as secretaries/front office managers/ recepotionsits take home sh239,000 and drivers sh248,000 gross pay every month.

Speaking during a "Developing Civil Society Agenda on Minimum Wage" event, Grace Mukwaya Lule, the Assistant Executive Director of Platform for Labour Action (PLA) says about 30% of employees in the private sector earn less than sh20,000 per month.
 
A report at the event read that "Rural women employed for wages in the private sector earn a median monthly wage of about Shs33,000, equivalent to a half of the wage earned by rural male private sector employees."

It went; "Only 15 per cent of the private sector employees earn more than Shs100,000 per month."
 
As it is now, there is a minimum wage of sh6,000 a month, which was decreed in 1984, though inflation and an increasingly higher standard of living means the amount is not sufficient.
 
Economists have argued that increasing the cost of labour will force companies to mechanize and seek sufficiently skilled workers to improve workplace productivity and in the end this will boost the growth rate of the economy.
 
"Without a minimum wage it is government losing," Wilson Owere, the chairman of the National Organisation of Trade Unions (NOTU), says. He explains that while government thinks cheap labor costs will attract investment, lack of a reasonable basic wage scares away focused investors as they are unable to properly budget.
 
He explains that a reasonable minimum wage would translate into higher purchasing power and higher Pay As You Earn (PAYE) taxes to government coffers, this money would in turn be used to fund vital projects. 
 
He noted that the International Labour Organisation (ILO) has instructed government to come up with a minimum wage by July 2015 but a minimum wage advisory board is yet to be constituted.
 
Employers weigh in
 
Rosemary Ssenabulya the Federation of Uganda Employers (FUE) executive director says while the FUE supports the setting up of a minimum wage, it recommends that the minimum wage should be for unskilled workers in the informal sector where no trade unions exist or operate effectively.
 
She says that the minimum wage should be affordable and cover sectors such as agriculture, construction, domestic workers and commerce/trade and that it should be determined by each economic sector to recognize certain unique challenges.
 
"It should be noted that the majority of the people of Uganda are employed in the informal sector, with another large majority employed in small and micro enterprises, "These sectors have unique challenges so they should be considered in the process of setting up a minimum wage which can be paid without the employers defaulting," Ssenabuya says.
 
"Within each economic sector, there are a number of individual challenges faced by sub-sectors. The wages in the Tea Agricultural Sub-Sector cannot be the same as those in the Horticultural Sub-Sector," she adds.
 
She explained companies in the export sector are reliant on prices are determined by external buyers and markets, which is different for local producers.
 
"The fact that local producers have no say whatsoever in determining export prices should be taken into account when determining wages and income," Ssenabulya says.
 
She says that minimum wages should be gender sensitive to uplift women since more women than men fill the lowest-paid jobs in retail, health care, and hotels.
 
"By investing in human capital, companies are actually reinvesting in their own brand. They are increasing labour productivity, which will help to make the company more successful over the long term,
 
"A minimum wage results in reduced absenteeism, less staff turnover, and better morale among employees, as well as lower recruiting and training costs for employers, and all of these contribute to higher productivity," Ssenabulya explains.
 
She says the minimum wage levels should take into account the realities of business in landlocked Uganda, namely the high costs of transport, freight and energy, and bank interest rates.
 
In addition, some enterprises that are giving their workers bonuses, housing, transport, medical care, food and other allowances which may not be quantified in monetary terms should be considered in the definition of the Minimum Wage.
 
Irene Mugisha, the FUE Director Communication, Marketing and Membership Development Federation of Uganda Employers points out that the minimum wage should not replace the collective bargaining process that was already in place.
 
She says: "Collective bargaining agreements have already set wages at levels that are affordable by each sector and the Minimum Wage should also be set according to what is affordable within each economic sector.
 
"If it is set above the levels indicated in Collective Bargaining Agreements, it could lead to retrenchments and unemployment and may not be sustainable."
 
As Uganda moves toward achieving first World status according to Vision 2040, the inability to set out a more reliable minimum wage since 1984 will have a large bearing on whether the country realizes her ambitions.

(Contributions by Stephen Senkaaba, agencies)