RYAN CHIGOCHE / FAITH MADZINGA
The Zimbabwe Congress of Trade Union (ZCTU) and teachers unions are demanding dollarised salaries as the Zimbabwe dollar continues to plunge against major currencies, especially the greenback.
They said the depreciation of the Zimbabwe dollar has fuelled inflation and economic hardships.
ZCTU said workers are currently in a ‘’sorry’’ state as macroeconomic conditions continue to worsen.
“The Zimbabwe dollar loses value every day, that doesn’t need rocket science to understand and the only viable way is a US$ salary that is stable,” the ZCTU president Florence Taruvinga told Business Times.
The call for US$ salaries comes as the government is working on a de-dollarisation plan with the intention of returning to the local currency as the sole medium of exchange.
It also comes as the local unit is on a free-fall against the dollar trading at 1:ZWL$350 on the thriving parallel market. On the foreign currency auction system, the dollar traded at ZWL$155 against the greenback on the formal market.
Taruvinga said the economy has redollarised despite assertions to the contrary by authorities.
“Companies are making profits, but their employees are (as poor as) the unemployed people,” she said.
The calls for US$ salaries comes as the cost of living for a family of six jumped 18% to ZWL$92,192.89 in March this year.
The Zimbabwe Teachers Association CEO, Sifiso Ndlovu demanded an urgent review of teachers’ salaries.
“The cost of living spiked to nearly ZWL$100 000.But, there is a huge difference in what a worker in education is getting and what the cost of living has become, making life impossible and difficult,” Ndlovu said.
But in his Monetary Policy Statement in February, central bank chief John Mangudya said there was no justification to have a US$ only economy. Mangudya said 56% of the transactions in 2021 were using the local currency and the remainder in dollars.
The government has also put in place a number of measures to support the use of the local currency such as the payment of taxes and duties in Zimbabwe dollar.
However, economist Moses Chundu said the call for US$ salaries is justified in light of the obtaining economic environment.
“They [workers] ask for the US$ because that is all that is known to them as a reward for their labour that is stable. If there was an alternative to that I am sure they would accept; all they are seeking is to preserve the value of their incomes. Wages are factor incomes just like profit, rent and interest hence should be treated fairly as such,” Chundu said.
He said workers and the poor are on the receiving end of the macroeconomic imbalances and disequilibria and have nowhere to pass on the cost to.
“It’s a fact that their purchasing power has been eroded endless times. While employers are quick to cushion themselves in other dimensions and happy to pay fairly to raw materials suppliers, for workers it’s a different story, they have little bargaining power and also the fact that salaries are paid on a monthly basis even where they can bargain the effect of the bargain is eroded by time,” Chundu said.
Business people, he said, now say quotations are valid for 24 hours but a worker cannot say the same of the wages.
Chundu added: “By design, they are valid for at least 3 months given the process of wage negotiations don’t conclude even in a month.”
