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Record Wage Hikes in Zimbabwe Spell Problems - 2004-07-07


The latest round of collective bargaining in Zimbabwe has produced large wage hikes for private-sector workers. But economists say the increases are unlikely to lift most workers above the poverty line and could hurt the employers who are already reeling from the weak economy.

The Zimbabwe Congress of Trade Unions predicted Wednesday that most private sector workers will almost double their wages as a result of the latest round of collective bargaining between labor unions and private sector companies.

According to U.N. calculations, the wage hike will bring salaries to about half the minimum required for basic survival. The U.N. estimates nine out of 10 Zimbabweans live below the poverty line.

The government still has to approve the results of the wage negotiations. If it does, the lowest paid industrial worker in the private sector will now earn about $50 a month.

Godfrey Kanyenze, director of the Zimbabwe Congress of Trade Union's research institute, said employers, who have been struggling in Zimbabwe's flagging economy will find it even more difficult to survive with the new wage hikes.

An executive from an engineering firm predicted that, as a result of the pay increases, employers may have to cut payrolls by as much as a third, worsening Zimbabwe's unemployment problem. The jobless rate in Zimbabwe is close to 80 percent.

International aid agencies estimate that at least three million people, or a quarter of the population, will need food aid this year.

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