Why minimum wage is important in any country

By David Omoding

We wish to congratulate the Government of Uganda for recognising the need for the minimum wage.

The month of June, 2015 will remain special and significant to all Ugandan workers as it has seen the Government fast track the actualisation of the minimum wage. This includes both the approval of the minimum wage advisory board and the appointment of its members.

The Government has obligations   to put in place the legal and policy regime, structures such as the minimum wages advisory boards and the wage orders defining the minimum wage.

The Board has the responsibility of convincing Government and Ministry of Finance that setting minimum wage is significant at all levels; national, regional and international and Government should adopt and implement it, contrary to the claim that if passed it will scare away investors and retard economic growth.

It will also conduct studies in all sectors of the economy including construction, agriculture and industry; and recommend the most appropriate figure for government to endorse.

Since independence Uganda has passed seven wage orders with the first one incepted in 1965 and second in 1970 where a minimum wage of at least sh185 was set for urban areas, tea and sugar estates.

The most recent minimum wage order was set in 1984.  It applied to the areas of employment of  the city of Kampala and all municipalities and towns declared  under the Local Governments Act, Lugazi town and sugar factories and plantation; Kakira Trading centre  and sugar factory  and plantation,  agricultural estates  (tea, coffee, cocoa, sugar, sisal and rice)  employing ten or more persons.

The employees in these sectors were earning a minimum wage of sh28.85 per hour, sh230.80 per day, sh1,500 per week and sh6,000 per month.  However, these figures have been rendered obsolete following the current economic situation and the double digit inflation.

At the regional level, out of the five member states in the East African Community, only Kenya and Tanzania are taking lead on this.

Minimum wage is essential because it marks an end to exploitation and abuse of vulnerable and marginalised workers, results in harmony and increased productivity, attracts Foreign Direct Investment, reduced rural – urban migration, poverty and corruption as low wages are a major recipe to poverty that fuels corruption.

As Platform for Labour Action (PLA) we call upon Government to adopt the proposals that this Minimum Wages Advisory Board will make.

The writer is advocacy and communication officer of the Platform for Labour Action
programasst3@pla-uganda.org