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May Day commemorations: Is there anything for the Zimbabwean worker to celebrate?

By Paddington Masamha

Readers and followers of this writer are primarily accustomed to macro-economic commentaries which largely focus on aggregates and large scale economic problems. However, a significant economic stakeholder- the employee; has not been given attention as a unit of analysis. As you and me celebrate Workers’ Day, let us cross-examine a few issues that warrant the attention of both government and non-government institutions.

Paddington Masamha
Paddington Masamha

A commonly acceptable position is to start the conversation by establishing how crucial a worker (labour) is in an economy. Elementary economics provides us with an understanding that land, labour, capital and enterprise are the conventionally observable four (4) factors of production. Labour as a factor of production is rewarded with a wage or a salary.

Fundamentally, labour is such a vital factor within national income equation. Primarily, it is through this factor that the other three factors of production can be fully utilised. Being fully cognisant of their national importance, the providers of labour services thus look forward to a worthwhile wage or income which can sustain basic livelihoods.

Emanating from a broader perspective, one can quickly notice that most political parties largely stemmed from labour movements and trade union activism. No wonder why some countries even have Labour Parties dominating the political sphere. As such; no normal government can afford to ignore the general working conditions and the concreteness of the rewards of labour.

Within the economics field; the International Monetary Fund (IMF) has now established ‘human capital’ as the substratum for economic development. Human capital development is predominantly focused on engendering the paramount fact that labour is central to development.

Global trends therefore show that labour is not only essential to central governments but politicians can only ignore this factor of production at their own risk. The field of finance and economics has always recognized labour as an indispensable ingredient within the production equation. As a direct consequence of stubborn economic challenges; the Zimbabwean economic atmosphere has not been geared up to accept the unavoidable reality that ‘labour is the economy and the economy is its labour resource.’

The Continuous Erosion of Labour Rewards: The Zimbabwean Worker’s Number One (1) Enemy

It has already been established that labour services are compensated with either a salary or a wage. Labour has been providing the required service but the erosion of the rewards has been devastating. At a more personal level; l guess a mini-case study would suffice.

Before Zimbabwe plunged into the economic abyss of the 2000s; having a government employed parent was a blessing. I vividly remember, back in the day when my father would travel to the nearest growth point to purchase groceries and it would be normal practice to bring a scotch cart to receive him as he disembarks.

As the new millennium beckoned economic conundrums gathered impetus. The economic hardships forced us to change from using a scotch cart to using a wheelbarrow, then mutated to a bicycle and later on my father would just get home with a small paper bag.

As young kids; we used to brag about how our family was the greatest at hosting the best Christmas celebrations, as well as having new, classy and fashionable festive season clothes. Later in his working life; my father would constantly motivate us with yesteryear stories of the good life and the potential dreams that he failed to achieve.

During the dollarization period; ‘the big man’ (as l prefer calling him) had an remarkable comeback. The currency certainty of the multi-currency system helped him regain some lost mileage. Today, as my father approaches his retirement age; a similar dark cloud of uncertainty surrounds his upcoming retirement earnings. Though with miniature variations, such is the nature of a Zimbabwean worker’s working lifecycle.  

The main story line of the Zimbabwean worker is that the value (worth/importance) of their salaries and wages has been topsy-turvy. Since 2000, the majority of the time the labour’s rewards have been deteriorating.

The concomitant allowances of transport and housing have largely failed to keep pace with the price changes. Under normal circumstances; a worker’s transport allowance is expected to cater for their monthly transport costs of going to work. In a similar manner; the housing allowance should at least afford a worker to at least have access to some decent shelter.

My analysis on labour rewards would be incomplete if ever l ignore the worker’s future incomes. It is a commonly known reality that worker’s pension deductions (be it NSSA pension, various government and private sector pension schemes) are principally the future earnings of the retired worker. As such, retirement income is such a crucial factor to employee motivation and drive to work.

As a result of the unpalatable hyperinflationary environment, workers who retire whenever the monetary regime is unstable are usually agonized with the pension income value destruction. For instance, during Zimbabwe’s lost decade; pensioners were reduced to paupers and their monthly pension payouts would be insufficient to cover just the transport costs to collect their earnings from the proximate banks.

When the economy adopted the multi-currency system (obviously without the bond note), pensioners regained their lost pride. Since the advent of the bond note monetary experiments and its new face the RTGS dollar; the predicament of the retired worker has been to gravitate back to the former rancorous days.

What about the pitiable Collective Bargaining Agreements (CBAs)?

The Zimbabwean economic meltdown has created a huge monster-an employer lord. It is actually a privilege to be employed within the economy which has an unsustainably high level of unemployment. Consequently, trade union activism and worker representations have been on a meagre scale.

The few brave workers who participate in worker activism are often times faced with intimidation and usually labelled ‘an enemy of the employer.’ The commonly available corridor crisis within organisations is decorated with rhetoric aligned to employer loyalty even in the midst of a ‘burning Zimbabwean economic blast furnace.’

Since last year 2018, both government and private organization employees have been largely engrossed with salary negotiations. Various salary demands were being tabled. Some workers demanded US dollar based salaries, others US dollar indexed incomes whilst some fought for cost of living adjustments.

Typically, the blue-chip companies paid employee ‘economic hardship stipends’ whose descriptions differed from organization to organization. The basic idea however was that private sector organisations were cushioning their employees against the erosion of their labour rewards.

As 2019 started; a number of collective bargaining agreements (CBAs) from various National Employment Councils (NECs) were published. The Zimbabwean government also made its own commitments to its civil servants. A statistical assessment of these public documents leads to one common conclusion that the salary increments are not matching the increase in the cost of living. As such; workers continue to hunt increments and or economic hardship cushions.

It is common cause that when a country is plagued with an inflationary spiral, the worst affected individuals are workers. Faced with the cost push effect of increasing costs of e.g. fuel; businesses have been passing on the increased costs to the final consumer. The final consumer (the majority of which are workers) has been negotiating for salary increments and or hardship allowances. On the other hand, the concomitant price increases have been inevitable in order to meet the new salary demands of the worker.

The increment percentages on the CBAs have been so paltry and insignificant to warrant any improvement in the purchasing power of the majority of workers. The bottom line is that the rewards for labour have not been commensurate with the simultaneous price changes.

However, this development should never be visualized as a sign that nothing positive has been obtaining within the economy. For instance, skilled negotiators (particularly managerial employees) have instead adopted a new concept of ‘quantum based salary negotiations’ as opposed to the common ‘value based incomes.’

Uncapped Expenses and Lop-sided Monthly Budgets

As the economy slowly gravitates towards the hyper-inflationary days; what is becoming clearer to the worker is that the monthly living expenses keep spiraling. The costs of food, clothing and shelter keeps escalating. The basic goods and services are becoming less and less affordable. Additional costs such as transport, travelling and accommodation have been sky-rocketing.

An additional giant expenditure item has been the back-to-school shopping. Being confronted with the massive increase in school fees, uniforms and associated educational expenses; the worker surely has limited room to celebrate the May Day.

My interactions with a number of parents has generally revealed one common problem-financial distress and unbalanced budgets. Parents (the majority of them are workers) have been crying about the foreign currency black market rates which they argue is their main source of funding for US dollar rated school fees. The same foreign currency black market has been the primary driver of the Zimbabwean economic comatose.

Ultimately, it has been very difficult to budget the workers’ personal finances. Those who manage to budget are usually given a rude awakening by the earth-shattering negative variances which is triggered by the constantly oscillating prices.

Future Outlook

Deep seated within the worker’s memory is the currency certainty and predictability of the US dollar denominated salaries. During this phase, the worker could afford to plan. Whether you talk of short-term or long-term projects; the uncontaminated multi-currency system was a favourable time period for most workers. As such, the expectation is that the Zimbabwean government should dollarise the economy.

Given a choice, workers would segregate the RTGS dollar because in their view; the monetary regime (bond note contamination of the predominantly US dollar economy) is the primary driver of the Zimbabwean economic demise. The demonetisation of the RTGS dollar would thus be great news to the Zimbabwean worker.

Going forward, having learnt a variety of lessons during the hyperinflationary days; collective bargaining agreements are slowly gravitating towards ‘quantum based’ salary negotiations. For instance, though on a limited scale; some workers now demand the payment of their salary cushions through fuel coupons, physical groceries and tangible goods as opposed to value based allowances and benefits.

Conclusion

In appending, one would want to hear the plausible answer of the question posed; Is there anything for the Zimbabwean Worker to Celebrate? In an attempt to provide an answer; those who consider themselves to be at least privileged to be working find a strong basis to celebrate.

Emanating from another angle; workers whose incomes have been eroded and going through financial depressions find no reason to celebrate the day. Assertively, another section of workers who visualize themselves as potential game changers are taking the day as an opportunity to fight for better working conditions, valuable salaries, worthwhile wages, commensurate pension schemes and engendering a robust economic environment.

Let the words of System Tazvida’s Mushandi Ndimambo song motivate us all. Happy day to all Zimbabwean workers.

Paddington Masamha is an independent Financial and Economic Analyst. He can be reached on email [email protected] and Twitter @PMasamha