KUDZAI KUWAZA THE planned strike by civil servants this week over poor salaries has once again put the spotlight on the impact of currency volatility on wage negotiations based on the rapidly depreciating Zimbabwean dollar.
The value of the Zimbabwean dollar has deteriorated as it is now trading at more than ZW$400 on the official exchange rate and at over ZW$800 on the parallel market against the United States dollar.
This has led to continued skyrocketing of prices of goods and services, which are indexed against the United States dollar with some products, such as sugar and Mazoe Orange Crush being charged exclusively in the greenback.
These prices are out of reach of the majority of citizens whose wages in local currency lag behind the galloping prices, amplifying calls by workers for salaries to be paid in United States dollars.
Inflation is now back to three digit levels with the rate for June standing at 191,6%.
Civil servants announced that this week they would embark on a nationwide strike as they have been impoverished by their wages denominated in the local unit. Negotiations between the government and its workers have collapsed.
Government refused to accept the US dollar salary demands by civil servants and stuck to its earlier offer of 100% salary adjustments in local currency which became effective on July 1.
Wage deadlocks over the waning local unit is not restricted to the public sector alone but has also engulfed the private sector.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
National Employment Councils (NECs) co-ordinating committee chairperson Rose Mambo, who was one of the presenters at a Mutual Gains Dialogue meeting held by the Employers’ Confederation of Zimbabwe (Emcoz) in Masvingo last week, paints a bleak picture of how the severely weakened Zimbabwean dollar has been a source of the chaos that has characterised wage negotiations.
“The main challenge that we are facing across sectors of the NECs is keeping up with the volatile economic environment. We now have sectors, which negotiate monthly and this is not viable for NECs because when they get together to negotiate, it has a huge bearing on costs, which includes having to mobilise all those, who are responsible for the collective bargaining process,” she said in an interview.
“It is also difficult when you have a salary that is continuously eroding because even when you negotiate monthly you can never keep up with the prices, which are skyrocketing in the shops.
“Most sectors are still negotiating in the RTGS. What they would ordinarily present is the breadbasket for a family of six and the poverty datum line but now you cannot talk about that because this has been overtaken by events,” Mambo said.
She added that sectors which negotiate using the interbank rate were struggling to keep up because the local unit is losing value on a weekly basis.
“Things are not looking good for consumers. It seems we are chasing the tail. We are in a vicious cycle. We don’t know what will happen next week or next month,” Mambo said.
Workers in the construction sector have threatened to down tools over wage deadlocks.
Private Security Workers’ Union secretary-general John Manyuchi declared last week that all security companies needed to pay workers using the United States dollar.
“What the employers are doing is that there are some security companies that are paying their employees in United States dollars, while some companies are paying employees in local currency,” he said.
“We call for sanity in the sector. The workers are requesting restoration of their buying power in denominating their salaries in US dollars.”
Earlier this month, the Zimbabwe Diamond and Allied Mine Workers Union (Zidamwu) wrote to the president of the Associated Mine Workers Union of Zimbabwe (Amwuz) raising concern over eroded salaries.
Zidamwu general-secretary Justice Chinhema described the 108,5% increment agreed for the mining sector as a slap in the face for mine workers.
“I write again to you at a critical time for our members in the industry. Today, the obtaining economic situation in the country characterised by high inflation, shortage of some basic commodities, skyrocketing parallel market exchange rates, including the interbank exchange rates, rising prices of basic commodities and services, among others, has left mine industry workers and the general people of Zimbabwe enduring the unbearable crisis and living in poverty while working,” Chinhema said.
Zimbabwe Federation of Trade Unions Kenias Shamuyarira said at the Tripartite Negotiating Forum technical committee meeting held in Mutare, they proposed payment of wages in both local and hard currency.
“We proposed a two-tier payment system in which part of the salary is paid in US dollars and the other being paid in local currency,” he said.
“Full dollarisation is not possible. We should also be working on the fundamentals to strengthen our local currency.”
Zimbabwe Congress of Trade Unions secretary-general Japhet Moyo, however, believes that the negative attitude of employers has worsened the conundrum around wage negotiations.
“Our view is that employers have been very difficult when it comes to the process of collective bargaining,” Moyo said.
“Employers have a negative attitude with some of them telling workers they cannot review salaries despite the increase in the price of basic goods and the rate of inflation.”
He said employers could not complain of continued price increases yet they are the same culprits who hike prices of goods and services.
