Let's check those price sharks

Daily Mail

THERE have been varied reactions from members of the public since Government issued Statutory Instruments to up the minimum wages for domestic workers and shop and general workers.
The minimum wages, according to statutory instruments No 45, 46 and 47 of 2012, have now been set at K522,400 from K250,000 for domestic servants, while for workers in grade one, who previously earned K419,000, will now get a basic pay of K700,000, K210,000 housing allowance, K102,400 for transport, with lunch allowance pegged at K120,000, bringing the total to K1,132,400.
For grade two shop workers who previously earned K510,000, the minimum pay is now K852,028, housing allowance of K255, 608, transport K102,400 and lunch pegged at K120,000 amounting to K1,329,636.
While the labour movement has welcomed the changes, the Zambia Federation of Employers (ZFE) has come out breathing fire, arguing that its members will not recognise the Statutory Instruments (SIs).
Ironically, while the ZFE says it will not recognise the SIs, some of its members have already hiked bread prices to make up for the increased minimum wages.
According to the Zambia Consumers Association (ZACA) and the Private Sector Development Association (PDSA), more companies are expected to increase prices of goods and services to ease the cost of production following the increase in the minimum wages.
Bakeries in Ndola have revised bread prices by K1,500 to meet the minimum wages and ZACA executive secretary Muyunda Ililonga says the increase is economically justifiable.
We are aware that the cost of production is likely to go up in some industries because of the revised minimum wages, but employers should not use this as a ‘blanket excuse’ to hike prices.
It is important to enhance productivity in most of the industries, which could lead to more goods and services being produced without unnecessarily increasing prices.
Where prices may be hiked, this should reflect the real cost of production, not just to use the cost of labour as an excuse to charge exorbitant prices.
The revised minimum wage is still arousing emotive debates, but the matter must be considered objectively to ensure both employers and employees get a win-win situation.
Price hikes without corresponding improvements in the quality of goods and services will just lead to high inflationary pressures which could be the same result from higher pay without improved productivity.
The issue of minimum wages requires sober discussion because, while some employers are complaining about minimum wages, the Federation of Free Trade Unions of Zambia argues that most senior managers get allowances to pay domestic servants.
Like we have said before, employers should not be confrontational but seek dialogue with Government, which so far has said it will not budge over the revised minimum wages.
We urge employers to seriously consider the ability of their customers to pay for goods and services, otherwise indiscriminate price hikes will not help resolve the impasse over minimum wages.
We are yet to hear the outcome of consultations between employers and their members, but it is important that they look at the interests of their employees and the profitability of their businesses.
Whether the Statutory Instruments were in line with consultations under the Tripartite Consultative  labour Council or not is not an issue, since the minister has authority to issue the statutory instrument and this has already been done.
The solution lies in finding an amicable way forward to ensure that employers and employees are both satisfied without resorting to unreasonable prices hikes.