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Calls for employers to pay salaries relative to economic situation

First lady Monica Geingos says there is an urgent need for the private sector to provide employees with essential benefits while labour experts have urged employers to pay salaries relative to the current economic situation.

Geingos, who was speaking during a visit to Namib Desert Diamonds (Namdia) last week, highlighted the significance of free housing, quality healthcare, and education for employees’ children as part of a broader effort to improve the country’s socio-economic landscape.

“We need to start speaking to the private sector of what it is we are doing for our employees . . . it is important to talk about corporate social responsibility, but we are the second-highest unequal country in the world,” the first lady said.

Geingos believes the only way to redress inequality is to invest in employees.

“It can be changed, yes, by creating more jobs, but secondly by really investing, those who are employers, into the human capital that provides them services, and ensuring their children also have access to the best,” she said.

Kavihuha Mahongora

This comes against the backdrop of rising inflation, with the overall inflation rate reaching 6,3% in May.

The recent increase in the repo rate by the Bank of Namibia to 7,75% added more challenges to the economic landscape.
Other hikes include utilities, with the cost of electricity increasing from N$1,82 per kilowatt-hour to N$1,98.

Trade Union Congress of Namibia (Tucna) secretary general Kavihuha Mahongora says employers are in a tight spot given the current economic climate.
Employees are, however, carrying the burden, he says.

“Even if we manage to get salary increments … will that increment be compatible with the increase in the prices of commodities?” he asks.
Mahongora says the government should put policies in place to cushion workers against the shock of various increases.

“This is when you need pro-employment and macroeconomic policies . . . The government has to put in place mitigating impact mechanisms involving that they subsidise crucial services and products,” he says.

Meanwhile, labour expert Sydwill Scholtz cautioned against simply boosting wages without educating employees on sound financial practices.

He proposes that companies explore fringe benefits to provide employees with more expendable income, suggesting that increasing salaries alone may not be the most sustainable solution.

“We need to be cognisant of the fact that just as the cost of living is rising, the cost of running a business also increases commensurately,” Scholtz says.

Herbert Jauch

He says companies should consider market-related salaries where feasible, but warns against burdening themselves with unaffordable payroll costs that could lead to retrenchments and increased unemployment.

Scholtz recommends that remuneration levels within the same sector align with recent surveys to ensure fairness and avoid underpaid employees.

He emphasises the importance of merit, delivery and the sustainability of both the company and employees’ income in determining salary increases.

In contrast, labour expert Herbert Jauch says higher wages are crucial in combating poverty and stimulating economic recovery.

He says wages are the primary source of household income in Namibia, and highlights the positive effects of increased consumer demand.

“As we have high levels of unemployment, the introduction of a universal basic income grant, as well as the provision of good quality public services such as education, health, housing and transport are other important interventions to overcome the current economic and social crisis in Namibia,” Jauch says.