Site icon The Times Group Malawi

Poverty, inequality and the labour movement

The 2013 Malawi Labour Force Survey shows that out of the country’s 16.8 million population, 7 million people 3.3 million males and 3.7 million females were in the labour force. Out of this, only 5.5 million were employed, representing an employment rate of 80 percent comprising 86 percent males and 74 percent females.

At 80 percent employment rate, it is tempting to assume that all is rosy for the country. The sad reality is that open employment in this country is very low for the simple reason that, with the current economic hardship, unemployment is unaffordable for the majority of the country’s labour force who opt to engage themselves in survivalist employment in the informal economy characterised by lack of job security, unpredictable working hours, few benefits and where they cannot afford to spend $2 a day.

According to the labour survey, a majority (64 percent) of employed persons (formal and informal) were absorbed in agriculture, forestry and fishing while 16 percent represented those in wholesale, retail and repair of motor vehicles. Only 4 percent were employed in managerial and professional occupations.

Most rural households where the majority of the population reside earn their livelihood from farming or fishing activities and have little prospects to seek off-farm income. In an attempt to run away from the harsh economic conditions, many rural people are migrating to urban centres in search of greener pastures.

But because of the trend, the unemployment rate in urban set ups have become higher than in rural areas (28 percent in urban areas compared to 19 percent in rural areas), reveals the labour study conducted by the National Statistical Office (NSO).

The survey notes that the average monthly mean and the median gross incomes of waged workers are K41,643 and K13,600 with workers in rural areas more likely to earn less than two third of the median earning than their counterparts in urban areas.

Such statistics only show the low levels of consumption by the country’s work force, a situation that compounds challenges to private sector growth and entrepreneurship and consequently prescribes low standards of living and poverty for the majority of the population.

As more and more people struggle for room in the informal sector, which accounts for more than 80 percent of total employment, low income, high food prices, high inflation, a run-away forex regime and low productivity have brought the workers on their knees such that despite working all day throughout their lives they do not earn enough for them to escape poverty.

The World Development report attributes poverty to lack of income and assets and powerlessness and vulnerability to adverse shocks, a situation more evident by the inability of Malawians to tame perennial exposures to droughts and floods which have absorbed the masses into poverty.

According to an Oxfam study titled “The Status of Inequality in Malawi”, last year alone, eight million people, about half of the country’s population, lived in poverty while 1.5 million more Malawians are predicted to slide into poverty by 2020.

“Malawi’s Gini coefficient, the key measure of inequality, also shows the extent to which robust economic growth is benefiting the rich whilst leaving the poor behind. In seven years of impressive growth, the Gini has leapt up from 0.39, on a par with Cameroon, to 0.45, on a par with the Democratic Republic of Congo”, the report states.

Executive Director of the economic think tank, the Malawi Economic Justice Network (Mejn), Dalitso Kubalasa notes that overall Malawi’s social indicators confirm widespread poverty and inequality.

“This is witnessed by low literacy rates, high mortality rates, high fertility rates, low productivity and low levels of income,” says Kubalasa adding: “The high fertility rate combined with a projected decline in infant mortality implies a high population growth that puts pressure on land, the environment and the delivery of social services”.

Kubalasa advises; “In order to facilitate sustainable economic development and attain people’s better living standards, the population should have access to basic social services including functional literacy, primary education, primary health care, clean water and sanitation and decent shelter.

Different studies have exposed that quality education, health care services and provision of social services largely favour the rich, a social class whose 10 percent, according to the Oxfam study, consumed 22 times more than the poorest 10 percent in 2004 while by 2011 they were able to spend 34 times more than the poorest.

While essential public services such as health and education are largely used by the country’s poor population, cuts to government budgets and shortages of social service necessities bite deep into the lives of the poor.

Malawi requires a strong and decisive leadership in all spheres of the society that is collectively committed to fostering the development of people’s lives by advocating and implementing pro-poor policies.

Previous leaders have only managed to formulate policies that have been implemented by political and economic systems discreetly designed to perpetuate the political, economic and social interests of the elite who have entrenched white collar corruption, bribery and fraud on public resources that should be spent on public services.

Experts have said until 2013, about 30 percent or more of the national budget was lost through corruption and fraud when donors contribute to the same budget about 40 per cent.

This has raised the stakes for the majority of the country’s economically active population whose poverty levels does not afford them the opportunity to effectively contribute to the growth of the country’s development.

The average worker does not have adequate disposable income to enable them demand and consume goods and services that can consequently oil national development and entrepreneurship, raise their living standards and allow them to exit poverty.

However, a ray of hope exists for the country’s labour force to claim their rightful place in society. This is through effective utilisation of trade unions in their respective fields.

Despite little knowledge of their existence across the country, trade unions are spread in almost all sectors of the economy with a prime aim to help in bringing equality, fairness, respect for human and worker’s rights and social and economic justice not only at the work place but also in the broader society.

Effective unionism promotes the economic interest of its constituency by facilitating consumer spending which in turn is a source of goods and service demand, stimulates private sector growth and foreign direct investment.

Unions mobilise against policies and programmes that are unfavorable to workers and their families, a calling that puts them at the driver’s seat to, together with other stakeholders, proactively participate in the country’s economic development by ensuring that policies for productive job creation and human capital development are in place.

This call empowers them to minimize capitalistic exploitative tendencies by exerting democratic control over public and state policy.

Always on their toes, trade unions must interpret emerging macroeconomic, social and demographic changes to identify growing trends such as in migration and urbanization, educational levels, rise or fall in social class consumerism as well as in the health sector.

Above all, they must ensure that the economy lifts poor households onto a higher income path.

Exit mobile version