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| Home News | | Minimum wages untenable, experts say | DAILY NEWS Reporter
Daily News; Wednesday,August 27, 2008 @00:02
| A team of experts from the University of Dar es Salaam (UDSM) commissioned to study minimum wages in the private sector, yesterday issued its report criticizing the proposed wages as unrealistic. The Ministry of Labour, Employment and Youth Development last April commissioned experts from the Economic Research Bureau (ERB) to review minimum wage-setting and assess its impact on the labour market, economy and people’s welfare.
Presenting the paper, ERB Senior Research Fellow and Principal Consultant, Dr Deogratias Mushi said that the study doesn’t recommend wage boards be asked to re-determine and reset minimum wages since over 50 per cent of employers have already implemented the order. By the same token, it does not recommend that the order be reinforced because there are obvious observations and indications that some employers cannot afford the new scales.
The report, he said, is set in such a way that the recommendations will not generate further distortions and complains and that if offered the best compromise between the various stakeholders within the minimum wage bracket. “The new wage rates were not set on the basis of any objective criteria … they were based on observations from meetings in which many of the sampled employers were represented,” he said.
He said that the variation of minimum wage by sector is significantly high with a standard deviation of 105,486/-, which is more than the minimum wages set for some of the sectors. In its findings, the team also said that the sub-categories of the minimum wage sectors were too vaguely defined and difficult to establish the implied boundaries.
The team therefore recommended that there should be clear definitions and boundaries of sector and sub-sector employers and that all should be enlisted by their categories accordingly, before announcing a new minimum wage order. The 2007 wage order has multiple wage rates for eight sectors that include health services, agricultural services, commercial, industrial and trade services, transport and communication, mining, marine and fishing, domestic services including hotels and private security.
Dr Mushi further said that variations of wage rates by age groups had been unnecessarily introduced in the wage order of 2007 and that its presence may lead to bias in the labour market - so that employers are likely to prefer employing those falling in the under-18 age group (between 15 and 18). The Minister for Labour, Employment and Youth Development, Prof Juma Kapuya, told stakeholders to discuss the report thoroughly to avoid any future complaints. During the same occasion, the International Labour Organization (ILO) country director, Jurgen Shwettman, said that setting up of a new minimum wage should involve the government, employers and employees. | | View Visitor's comments on this Story
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