Poverty Datum Line at $150

Poverty Datum Line at $150
Published: 30 May 2014
Industry should use the Poverty Datum Line (PDL) of a single person when calculating the minimum wage across the respective sectors, a Reserve Bank of Zimbabwe official has said.

According to latest calculations from the Zimbabwe National Statistical Agency (ZimStats) the PDL for a single individual is around $150.

RBZ senior division chief in the Economic Research and Policy Enhancement division Simon Nyarota was responding to a question by an industrialist during the open session of the Confederation of Zimbabwe Industries (CZI) annual general meeting.

Nyarota was representing RBZ governor Dr John Mangudya who was supposed to address the event.

"The definition of Poverty Datum Line is misconstrued. Employees assume that the current PDL of around $550 is for one person, but this is the PDL for a family of six.

"ZimStats calculates the PDL for a single person and it is actually between $140 and $150 and that distinction should be very clear. So when employees are looking at the situation and considering what the lowest amount they should pay their employees they should look at PDL for a single person," he said.

Local industry is struggling under a difficult operating environment typified by liquidity challenges and have said they are finding it hard to cope with demands by labour unions to match wages to the PDL.

The recommendation that employers should use the PDL for a single individual instead of the PDL for a family of six will come as a relief to industry which has been saying high wage demands are unjustifiable in the prevailing economic environment.

But it has not been well received by employees. Workers who spoke to BH24 said such a move would be "inconsiderate".

"It would be very inconsiderate to set minimum wages of around $150. This view that industry should use the PDL for an individual to calculate minimum wages would be reasonable if there was a high level of formal sector employment, but as it stands you will find out that an single individual may be responsible for an entire family," said Itai Dhliwayo.

The labour environment is currently one of the major structural bottlenecks that are affecting the local manufacturing sector, whose capacity utilisation has been on a decline since 2012, despite gains in the early years post-dollarisation.

According to the different Confederation of Zimbabwe Industries (CZI) Manufacturing Sector Surveys suggest that industrial capacity utilisation increased to 33 percent in 2009, 43,7 percent in 2010 and 57,2 percent in 2011, before declining again to 44,2 percent in 2012 and 39,6 percent last year.
- BH24
Tags: RBZ,

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