Why would a government set a minimum wage? Reasons may be classified, somewhat simply, as being economic, social or political.
Earlier this year, Shenzhen Province in China increased its minimum wage in response to a pending labour shortage. Other provinces were paying more, so the flow of workers to Shenzhen was lessening. A good illustration of the fact that while low labour rates are necessary to attract labour intensive industry, competition for that labour may in fact lead to higher wages. It is the basic interplay of supply and demand. It may not be pretty, but it seems sensible in the grand scheme of things.
Other reasons may be social – the wish to ensure that labour is given an adequate return on which to base a reasonable life.
Or they could be political. A populist government may make such an announcement for short term political gain with the masses, rather than in consideration of broader economic issues or the concerns of differing interest groups.
So how do we classify John Chiligati’s announcement of minimum wages for different sectors, announced on October 8 this year (implementation postponed to January)? Dar es Salaam’s The Guardian newspaper reported the rates the following day. Forgive me for reproducing them here in all their absurd detail.
Housemaids TZS65,000 (less 68 percent if living with the employer)
Employees of small hotels TZS80,000
Employees of Five Star Hotels TZS150,000
Housemaids in diplomatic missions TZS90,000
Clearing and Forwarding TZS300,000
Telephone Companies TZS230,000
Drivers and Conductors TZS200,000
Aviation Services TZS350,000
Minerals Sector TZS 350,000
Media (religious) TZS150,000
Media (business) TZS250,000
‘Big’ Security Companies TZS105,000
‘Small’ Security Companies TZS80,000
‘Small Factories’ TZS80,000
Agriculture Sector TZS65,000
The list above is clearly not exhaustive. Amongst those sectors not mentioned in The Guardian were: education; IT (is raha.com a telephone company?): and the whole poverty alleviation sector of NGOs, international organisations and the like. Maybe because the donor money flowing into that most unproductive of sectors means wages are pretty good?
The schedule itself smacks of the dead hand of bureaucracy, desperately attempting to account for the actions of those in business, but with no real understanding of the game – who wins and who loses, and how. What is a ‘small’ factory. What is a Five Star Hotel? For we have no such official classification in Tanzania. Why are housemaids in diplomatic missions worth more than those in John Chiligati’s house?
Speaking of which, if the government is so concerned about the treatment of housemaids, why have they remained silent in the light of the case of Zipora Mazengo, former housemaid of Alan Mzengi in the Tanzanian Embassy in Washington? This case first came to light in May of this year . The House Foreign Affairs Committee heard her testimony on October 18 2007 . Who can argue with Rep. Dan Burton (R-IN):
“It seems to me that the Congress of the United States and this committee needs to demand of the State Department and any subsequent administration of State Department leadership, that anybody who treats other human beings like this should automatically lose their right to represent their nation in this country and should be deported immediately. We need to take their diplomatic passports and kick them out of the country. That would send a signal to countries around the world that we are not going to tolerate this sort of thing.”
So are the actions of John Chiligati motivated by reasons that are economic, social or political?