Minimum wage should come with minimum skills
…watch out, your nanny, shamba boy, messenger… could soon sue for underpayment..!’
This was the immediate reaction on social media, in the wake of the passing of the Minimum Wage Bill. This is as well and was long overdue, having given Uganda the image of the country with the cheapest labour.
However, the devil now is in the implementation details. What job qualifies to be paid the minimum wage? Whereas the civil service has salary scales and a few structured private companies have salary levels, I am not sure whether we have a scale onto which to rank jobs and services in the ‘informal’ sector, thus obtaining a baseline for the minimum wage.
Would a gardener and a cook earn the same wage or salary when employed in the same middle-class urban family as domestic labour? Which is the determinant variable? You see, employers do not offer jobs. They buy skills, at the different levels of sophistication. And each level of sophistication is essential for the input it makes into the final output of the process: A janitor in a factory is as essential as the design engineer or the assembly technician.
It, therefore, follows that for employers to get value for money from the new minimum wage legislation, the employees should have saleable skills. And the buck for this stops with Parliament again.
We borrow a leaf from the Kenyan practice, where a whole authority exists, to enforce human resource skilling across all sectors of the economy.
The system works thus: Employers are obliged by law to contribute to the Nita (National Industrial Training Authority) Fund, the way it is for social security. The Authority prequalifies training firms in different areas and shares the database with the employers.
Upon training their staff, companies pass the training bill to Nita, who in turn pay the trainers. Since the funds contributed are not refundable, it is in the interest of employers to have their staff trained.
In a typical Kenyan corporate, one of the key result areas for a head of department is the number of their staff skilled in a given quarter.
The training cuts across all domains - from the core skills relevant to one’s job to general application skills, including soft ones, resulting into a work force with the correct ratio-mix of the three key performance pillars, namely knowledge, skills, attitude (the KSA pillars).
This is the only way we shall position Uganda as a preferred investment destination. And contrary to general belief, true investors will go to a country where the manpower is skilled, regardless of high wages and salaries. The current scattered and uncoordinated efforts dubbed Skilling Uganda will not take us far. This donor-funded scheme narrows training to what it calls ‘technical skills’, ignoring the other two components of the KSA pillars.
Moreover, with the provision for co-funding (under matching-grants), most companies are reluctant to apply for these funds, since they may either not have the internal funds to match the grant, or not value the importance of the skilling. This underscores the importance of reinforcing the minimum wage with a legislation along the lines of Kenya’s Nita system. Relatedly, professionalisation of domestic labour is long overdue.
We abolish the traditional practice of the live-in housemaid/houseboy practice. The service goes to professional companies, who hire and train domestic services staff, manage, market and deploy them to homes the way it is with security guards. With proper legislation and supervision, this essential service will become a win-win for both employers and employees.
Over to you our legislators. Hard but surmountable task.
