Zimbabwe cannot afford labour's pay demands

WITHOUT exception, all employers have been confronted with demands from employees in general, and the labour force in particular, for increased wages. Most collective bargaining agreements have been reached after prolonged, usually very confrontational negotiations, frequently only concluded after referral to arbitration, or to the labour court, and almost always being of very limited duration.

Within months of the agreements coming of force and effect, new demands for wage increments emanate vociferously from the representatives of the labour, usually vigorously goaded and reinforced by the trade unions. All too often, not only are the demands centred upon major increases, but also with insistence that such increases be with retrospective effect.

That workers crave substantial wage increases is unsurprising because wages are far below the workers' essential needs. In most instances, wages do not suffice to meet the fundamental living requirements of the workers and their immediate families.

In addition, as a consequence of the gargantuan levels of unemployment, and due to the impacts of HIV/Aids and innumerable other health constraints, most income earners have not only responsibilities for their immediate families, but also for innumerable other dependants. It is little wonder, therefore, that workers consistently seek improvement in their incomes.

However, in doing so, they are all too often dogmatically oblivious to the reality that very few employers have the resources to fund the demands for higher wages. On the one hand, commerce and industry has had its capital resources wholly decimated by the history-breaking hyperinflation that confronted Zimbabwe in 2008. The capital required to continue operations is trillions' percent greater than was needed before hyperinflation flagellated all sectors of the economy. Almost all enterprises were undercapitalised to fund operations at even the abysmally low levels that prevailed in 2008, let alone to meet the needs of any business growth.

On the other hand, the survival of businesses continues to be contingent upon competitively pricing in both domestic and export markets. Since 2009, Zimbabwe has had vast inflows of goods from neighbouring countries, from the Far East and from other countries.

Almost without exception, the foreign suppliers benefit from higher volumes of production than attainable by their Zimbabwean competitors. This enables them to spread their production costs and, therefore, to minimise selling prices. In addition, their wage levels are considerably less than those prevailing in Zimbabwe (notwithstanding the inadequacy of those wages to sustain the Zimbabwean workers) and as a result, the foreign suppliers can price their products very competitively. The same circumstances impede Zimbabwean product competitiveness in export markets.

In those circumstances, however, great workers' needs for higher wages, their demands are grossly unrealistic. They cannot be met by employers, and trigger innumerable business closures or, at the least, downsizing with concomitant diminished numbers employed. But workers and trade unions are myopically oblivious to this. The divide between business and workers has been growing greater at an exponential pace. It is undermining the best interests of employers, workers, the economy in general, and the populace as a whole.

Recently, Zimbabwe Congress of Trade Union president Lovemore Matombo, in an interview with The Legal Monitor, said that consultations were underway between labour organisations across the sector to mount strong action against employers. He said that the patience among workers had worn thin, and that "every labour movement, every trade union in this country, has a problem with its employer and what we are saying is let's galvanise support so that as we approach June, all of us are geared to go on a strike, but it has to be collective."

He contended that "we will have to do that.  We have no option." He added that the confrontation was most likely to take place because government and most employers were resisting calls to match salaries and wages to the poverty datum line (PDL). It currently stands at just over US$500, whereas most workers in the public and private sector earn between US$100 and US$300.

That workers, supported by their trade unions, aspire to earn wages equal to, or above the PDL, cannot be faulted. No-one can wish that others should be struggling to survive in extreme poverty. They, however, ignore many fundamentals including that:

Employers cannot pay that which they do not have;

It is better to earn little, than to earn nothing. When demands are pitched at employers at unsustainable levels businesses collapse and the workers are rendered unemployed, and therefore wholly devoid of income;

Endless wage confrontations impair the already low levels of productivity;
Wage demands beyond employer means not only halt Zimbabwe's economic recovery, but will reverse it.  That will result in even greater poverty. It will result on more becoming dependent upon the few fortunate enough to have some income, even if that income is inadequate.

Because workers and the trade unions obdurately disregard the realities and instead intensify their demands and confrontation, they are suicidably destroying themselves, concurrently with their destroying Zimbabwe and its economy.

Eric Bloch is a columnist for the Zimbabwe Independent