There is a steady but consistent rise in the cost of living in Uganda, fueled by the recent rise in prices that is making it unbearable for majority workers to have decent lives.
On Thursday 19th May 2022, Wizarts Foundation hosted a Twitter space to discuss the strategic direction of the Government of Uganda, in protecting and promoting the rights and welfare of vulnerable workers. This discussion was intended to bring together government duty bearers, academic and former finance Minister – Prof. Ezra Suruma, representatives from the labour movement, civil society and the youth, who form majority of our population today, to address the question around minimum wage given the current economic hardships caused by inflation.
For years now, there’s been sustained pressure on the Government to protect vulnerable workers from such economic shocks and other vulnerabilities, including exploitation of labor by employers, through a statutory legislation on minimum wage that would set the lowest monetary value payable to a worker.
However, Government has ignored this plight. The Permanent Secretary at the Ministry of Finance and the Secretary to the Treasury – Dr. Ramathan Ggobi at the launch of the National Budget month 2022/2023 last week, re-echoed that Uganda is not ready for minimum wage, claiming this move would hamper development and increase levels of unemployment.
Currently, Uganda’s minimum wage stands at UGX 6,000 per month for all workers, going by standards set previously in 1984 under the Obote regime, before the political instabilities that ushered-in President Museveni in 1986, who came with a promise of a mixed strategy to address Uganda’s development challenges among his ten-point program. This strategy is, however, not reflected in the social protection of workers today.
Although parliament granted leave in 2013 to allow Workers’ MP, Arinaitwe Rwakajara to draft a private member’s bill on minimum wage, the legislation attracted no interest from the Executive, as the 2015 bill that was passed by parliament continues to gather dust on the shelves, awaiting the President to assent to it into law for several years now in vain.
Rwakajara argued previously that the existing legislation on minimum wage is outdated and exposes the Uganda worker to exploitation by the employer. However, Government in its wisdom is opposed to a law regulating minimum wage. President Museveni has consistently argued that the minimum wage law is ill-advised; likely to increase unemployment, disincentive foreign direct investment and deter economic growth for a country attracting foreign investment.
According to the 2016 National Household Survey by UBOS, the size of Uganda’s labor force is about 10 million for a working population of 19 million people, aged between 14 – 64 years. The national unemployment rate stood at 9 percent then, with persons in paid employment standing at 38 percent, most of whom were in Agriculture, with a share of 36 percent employment in the sector.
The hope for a middle-income status for Uganda by 2020 was thwarted and already passed its deadline. Tanzania was however, able to realize this goal, undeterred by doomsayers suggesting that the raise in minimum wage would affect investment and therefore development for the country. President Samia Suluhu recently announced a raise of 25% of the minimum wage in May 2022.
In Kenya, in response to the global spike in prices and the high cost of living, President Uhuru Kenyatta increased Kenya’s minimum wage by 12% from Ksh. 13,500 (about UGX 405,000) that was previously set three years ago, to cushion workers from the surge in commodity prices. Meanwhile, President Museveni in his Labor Day message, advised Ugandans to become more enterprising and eat cassava to survive the current inflation.
For Uganda, there was a proposal in the bill to cap the national minimum wage at 250,000 Uganda shillings. The 2016 household survey shows that the median monthly wage for a Ugandan stands at Ush. 168,000 (National), Ush. 220,000 (Urban) and Ush. 120,000 (Rural). The median pay for males was Ush. 220,000 and Ush. 110,00 for females.
However, vulnerable employment that was even exacerbated by the covid-19 pandemic, stood in 2016 at 61% of the persons in employment, 71% of whom were female. The survey confirmed that only 30 percent of paid employees have written contracts with their employers, with the figure dropping to 23 percent for those living in rural areas.
Only 11.9 percent of paid employees received social security contributions while about 26 percent of women were entitled to maternity leave. Still, only seven percent of the employees were members of a trade union or a similar employee association, while trade union membership was also significantly higher for the public sector (14 percent) than the private sector (3 percent).
Amidst these challenges affecting the Ugandan worker, with limited wage employment, high informality, low trade union membership and significant dependence on a largely subsistence agricultural sector; the elevated unemployment and underemployment levels, means that there is an over-supply of labor with more and more people willing to do the same work for less. This has elevated the calls to legislate and raise minimum wage.
Proponents of the minimum wage argue that this law would serve the purpose of reducing income poverty, redistribute income and protect vulnerable workers from exploitation. However, a report by Akina mama wa afrika shows that the law alone is not enough, as there are reportedly only 35 substantive labor officers in the country serving over 10 million workers. They hold that this is nowhere enough labor officers to provide protection and ensure the rights of the most vulnerable workforce.
The purpose of Wizarts spaces on Face the Citizens is to engage members of the public on topical and thematic issues affecting us, with the overall goal of promoting civic engagement and media literacy: aimed towards awakening public consciousness, raising awareness and increasing civic competency on key development issues. You can listen to this space on minimum wage below:
Wizarts Spaces are hosted on Thursday every week by Wizarts Foundation: a non-profit media NGO with the Vision and Mission to transform media and impact communities by opening windows of knowledge.