MCTU Says Revised Minimum Wage Gives No Hope, ‘The cost of living has gone up’

Malawi Congress of Trade Union (MCTU) has responded to the revised minimum wage of K35, 000 saying it does not offer any hope as workers will fail to meet basic needs.

This has been said by MCTU General Secretary Denis Kalekeni.

According to Kalekeni, the rate does not make economic sense as the cost of living, recorded at K196 450 as at June 2019,  has also gone up, hence their minimum wage proposition of K45 000.

“K35 000 is completely nothing for workers to meet basic needs because cost of living has gone up. This rate does not give minimum wage earners a chance to manage their livelihood,” said Kalekeni.

Kelekeni continued; “But we understand that the general minimum wage could cost jobs for most domestic workers hence; going forward, we have agreed to move to sectorial wages where each sector should have its own minimum wage depending on the capacity”

Considering for a fact that some of the factors making life of workers to be tough are coming from the levies and essential services, Kalekeni said their organisation is proposing to have some of the levies reduced.

“Our proposal, therefore, is to have some of these levies on water, electricity and fuel reduced and that our hospitals are provided with all drugs to ease pressure on the minimum wage earners.” He said.

He, however, expressed excitement with the increased tax-free band, which he said provides relief to low income earners.

In his 2019/20 National Budget presentation on Monday, Minister of Finance, Economic Planning and Development Joseph Mwanamvekha said on account of the sky-rocketing cost of living biting many average Malawians, Treasury has adjusted upwards the pay as you earn (Paye) tax-free bracket by K10 000 from K35 000 to K45 000.

He also said Treasury has increased the minimum wage from K25 012 per month to K35 000. This adjustment, the minister said, will help protect lowly-paid workers and improve their welfare.

The wage hike comes three years after Treasury last increased the minimum wage by 24 percent from K19 000 to K25 000 a month, a development which was contrary to MCTU’s earlier proposal of 58 percent (K33 000) wage hike.

In the last financial year, Treasury also raised the tax-free band from K30 000 to K35 000 per month, in order to improve the disposable income of taxable salaried persons.