How do Minimum Wages affect you

by Karen Rutter — last modified Apr 12, 2011 10:39 AM

All about Minimum Wages in Malawi, Rural and Urban Minimum Wages, the Basic Needs Basket and more on Mywage Malawi

What is Minimum Wage?

Minimum Wage in Malawi is the lowest wage that an employer is allowed to pay an employment according to the Employment Act 2000. The Minimum Wage basically aims at improving the living condition of an employee.

How does Minimum Wage Work in Malawi?

The past few years have seen the country’s minimum wage being calculated on an urban and rural basis. Urban implies those employees working in cities, and Malawi has four cities at present: Mzuzu, Blantyre, Lilongwe and Zomba. Rural areas refers to those employees working in remote areas where they may encounter challenges, including high transport costs.

New Minimum Wage approach

Following various debates over the years, the country has now taken a new approach and has a new minimum wage of K178 per day for both urban and rural workers. It was gazzetted on December 31, 2010 but was implemented on January 1, 2011.

Malawi Congress of Trade Union (MCTU) Secretary Robert Mkwezalamba says the decision to come up with a flat rate came after observing that the cost of living was high in both urban and rural areas, and that this was also to motivate more people to work in villages. Many people prefer to work in urban areas, for example teachers, which means many schools in rural areas have had an inadequate supply of teachers.

Cost of Living in Malawi

Despite the revision, Malawi’s minimum wage is still low and cannot keep a family of six above the poverty line. The Centre for Social Concern (CSFC), an organisation which produces the Basic Need Basket (BNB) every month, notes that a major concern for many households is the size of their income. The BNB is a tool that measures the average cost of basic food and essential non-food commodities for a Malawian family of six in a specific city.

In February 2011 the organisation recorded a considerable increase in the cost of some basic needs in Malawi’s four cities. In Mzuzu the cost of living went up from K41,708 in December 2010, to K43,312 in January, 2011. In Lilongwe the cost of living jumped from K50, 298 to K51,336. Blantyre moved from K48,696 to K52,080 and Zomba from K41,649 to K42,608.

Prices

As of February, 2011, some of the prices for commodities in the three cities of Mzuzu, Blantyre and Lilongwe are as follows:

Minibus fares to and from town:

Blantyre – K160

Lilongwe - K240

Mzuzu – K180

Fuel (per litre):

Diesel – K290

Petrol – K260

Paraffin – K155

Other necessities:

Bread – K117