KAMPALA— Upon arriving in Geneva, Uganda’s delegates to this year’s International Labor Organization conference found themselves under attack.
Despite decades of debate, Ugandan legislators have yet to establish a minimum wage, a fact that labor activists are criticizing.
With the ILO demanding that Kampala officials establish one by next year, the government's labor minister responded with assurance that a minumum wage would be in place by 2015.
But within Uganda the move is controversial, with many saying the focus should be on attracting investment and creating jobs.
According to Oloka Mesilamu, who represents the construction industry in Uganda’s National Organization of Trade Unions, a minimum wage is crucial to prevent rampant exploitation.
“What is happening is that in the absence of minimum wage, these workers who are not skilled are exploited more because, given the unemployment rate in this country, employers pay anything," he said. "These workers, because they are desperate, they take anything they are offered."
A minimum wage, he says, would make Ugandan workers more productive.
“These things have a direct bearing on the performance, the productivity," Mesilamu said. "When workers are poorly paid, they don’t perform. So it is important for the economy as well.”
A lengthy debate
The Ugandan government has long been reluctant to fix a minimum wage. The country’s labor minister recently agreed to consider a proposed wage for unskilled workers is 75,000 shillings, or around $30 a month, but only after studying the matter carefully.
Pius Bigirimana, of the Ministry of Gender, Labor and Social Development, warns that acting too hastily could be bad for everyone.
“You don’t just rush into a minimum wage without studying, to look at employment trends, to look at the cost of living and the wage trends by profession, by geographical regions," he said. "So fixing a minimum wage without regard to all these factors may destabilize our macroeconomic framework and affect employment trends.”
Sarah Ssewanyana of the Kampala-based Economic Policy Research Center says most proponents of the minimum wage do not truly understand the Ugandan economy, where most jobs are informal and do not pay regular wages.
Enacting a minimum wage could cut into formal employment even further, she says, or force employers to find other ways to recoup their costs.
“Some of the benefits can be withdrawn, or this guy is going to reduce on the number of people that he is employing and make sure that he overworks this person whom you have already dictated that he has to get the 75,000,” said Ssewanyana.
While countries like Kenya and Nigeria do have minimum wages, their private sectors are also better developed than Uganda’s, Ssewanyana adds, explaining that Uganda needs to focus on increased employment, even if it is badly paid.
“Our economy, it has been growing, but not creating that kind of employment that one would have loved to see," Ssewanyana said. "Why can’t we just focus first on transforming our economy so that the economy can create jobs, and then maybe later on you can start the discussion of the minimum wage.”
Uganda’s labor minister has promised to enact a minimum wage by July 2015. In the meantime, says Mesilamu, the labor unions are pushing hard to ensure that such promises are kept.