THERE was understandable enthusiasm
in the manner in which a recent report that the government is poised to sign
into law new minimum wage guidelines for the private sector was aired.
It gave the impression of a done deal
for a move outlining updated salary levels for various categories of employees.
Yet, on close examination, it is
clear that there was a round of consultations still lying ahead, and everyone
knows that a lot remains to be done. Indeed, there is little hope of any major
breakthrough as what sets a minimum wage is labour availability, at least for
the private sector.
The reason is that competition is
ferocious outside there and no employer can share out all the benefits with
employees for the sake of providing a living wage except paying in such a
manner that he or she has an encouraging level of profit.
One would say that setting the
minimum wage, and especially for the private sector, occurs by taking account
of relative rates of profit for the different sectors and sub-sectors. Public
sector minimum wage setting is a different issue in that the state collects
funds from sections of society to pay civil servants.
The government looks all but
optimistic that, with comprehensive consultations having already been conducted
with major stakeholders including employers’ organisations, policy regulators
and government departments, a final meeting to set proposed wage levels could
take place early as next month.
While this schedule has been somewhat
tempting for the trade union negotiators, many analysts appear far less
expectant, aware that this year’s budget proposals have been finalised where
such proposals would have been embedded.
What lies next is the General
Election and hardly anyone is paying much attention to substantial government
initiatives particularly during the campaign period.
The government is evidently mindful
of the welfare of private sector employees if it could fix a wage deal and it
sticks, without mass layoffs if profit projections are severely affected.
The reality is grasped across trade
union ranks, as they often negotiate with employer organisations and these
things have to be explained. That is why the legislature and an array of
experts generally debate tax levels in various sectors as it has a singular
impact on profit generation and even wage levels. It is in this sphere that
employers expect, and want, measures.
That is why formulations like the
government being committed to improving labour laws to meet essential needs of
the workforce are somewhat imprecise, as it isn’t labour laws which enable
workers’ welfare to be met but low taxes and low prices of goods.
This could indeed be the case if the
government was collecting revenues from all commercial institutions instead of
having more than three hundred public agencies which don’t pay taxes but expect
vast subsidies from the government.
It also takes out loans to procure
equipment or technology for such firms, thus ballooning the foreign debt, and
hence the need for it to increase taxes to pay out the loans and vast wage
claims.
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