Minimum and Living Wages in Zambia: Wage Gaps and Collective Bargaining

Abstract

Across the world, minimum wage rules play an important role in shaping the wage structure among the lowest paid (ILO, 2010). However, the character of effects depends on a vector of interlinkages and interactions with structures of collective bargaining and how the level of the minimum wage relate with the living conditions for workers and typical families. Using the Wage Indicator Foundation Database, this paper sets out to analyse how minimum wages in Zambia relate with the cost of living for workers and typical families in order to understand what would constitute a model collective agreement in Zambia and thus inform trade union strategies and actions for improving workers’ conditions. More specifically, the paper is guided by the following three broad questions:  How does the minimum wage in Zambia relate with the national average wage for paid employees?  To what extent is the minimum wage reflective of the cost of living for workers and typical families in Zambia and what gaps exists between the minimum wage and the living wage?  What would constitute a model collective bargaining agreement for improved conditions of workers in Zambia? On this basis, the paper presents a quick investigation of these issues for Zambia – providing a somewhat broader basis for creating a model collective agreement. The paper is organised into four sections. The first section introduces the rationale of the paper. The second section conceptualises and analyses the level and scope of the minimum wage in Zambia and how that relates with the national average wage and the Gross Domestic Product (GDP) per capita. Section three analyses the relationship between the minimum wage in Zambia and the living wage of individual workers and typical families to understand what gaps exist. Section four recommends a model collective bargaining agreement for melding the discussion and consolidating action points for the living wage agenda.