U.S. Dollar denominated wages in Zimbabwe have registered substantial declines except in one sector, according to a report by the Confederation of Zimbabwe Industries (CZI) on the Analysis of Collective Bargaining Agreements (CBAs).
The findings show wage hikes have not been following a consistent trend: “In U.S. Dollar terms, there was a sharp decrease in wages in all the sectors except the Electronic, Radio, TV, Manufacturing and Allied sectors, where wages were increasing every month in both ZWL and USD.
“In the urban and rural cotton industry, wages were increasing in ZWL terms but falling in USD terms,” the report states.
“The fact that the minimum wage is generally decreasing every month in U.S. Dollar terms simply means that the ZW$ is failing to keep pace with the exchange rate movements of both the official and parallel market. Exchange rate instability is, therefore, a threat in the CBA processes,” the report adds.
The Confederation of Zimbabwe Industries went on to say that based on the official exchange rate, the country’s minimum wage in the agriculture sector is higher than Tanzania and Zambia, yet the remaining Southern African Development Community (SADC) countries have a higher minimum wage than Zimbabwe, New Zimbabwe reports.
“However, when using the parallel market rate, Zimbabwe becomes the country with the lowest minimum wage of $34 as of March 2022. Since prices are indexed to the parallel market rate, an average Zimbabwe consumer is worse off and more vulnerable to poverty compared to counterparts in the other SADC countries,” the findings state.
The report also shows that in the first quarter, real wages in all sectors were declining overall, as the increase couldn’t keep up with soaring inflation.
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