ZIMBABWE’S trade unions are escalating their push for US dollar – indexed salaries, in response to deteriorating living conditions, which escalated last Friday, after under fire policymakers devalued the five months old gold – backed Zimbabwe Gold (ZiG).
The Zimbabwe Confederation of Public Sector Trade Unions (ZCPSTU) and the Zimbabwe Congress of Trade Unions (ZCTU) indicated this week calls for significant reviews were mounting.
Some economists have estimated that ZiG has tumbled by 36% since launch in April - most of its predicament triggered by a thriving black market currency trade – the only market where foreign currency is available, but at exorbitant rates.
Banks have long stopped lending to the majority of markets.
The currency - said by authorities to be backed by buffers of gold worth hundreds of millions of US dollars - had surrendered value on the formal markets, sliding from US$1: ZiG13,56 on introduction to about US$1: ZiG13,95 before last week’s aggressive devaluation.
But it had plummeted by wider margins on the black market from about US$1:ZiG16 at launch to about US$1:ZiG45 this week.
Workers say there are feeling the heat.
But many companies argue that paying wages exclusively in foreign currency would leave them in doldrums. The bulk of their revenues are in ZiG. Workers agreed with their union leaders.
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"They must act now," said Christina Munyai, a civil servant, who stays in Harare.
"Last month I paid ZiG1 100 to buy these groceries. Today buys me much less. Life is unbearable. Our salaries are not rising at the same pace. We are in pain," Munyai said.
For almost five months policymakers had stuck to the managed exchange rate of about US$1:ZiG14, even after black market rates had barrelled to US$1:ZiG32 in the past week extending a premium that industries say had evolved into a big threat.
At a supermarket in central Harare, consumers picked up products, looked at prices, dropped, and abandoned them.
Dejected, Munyai stormed out leaving a half filled trolley, hoping to find respite elsewhere. In a supermarket in Banket, Jane Moyo hit a dead end.
Shop keepers turned down her ZiG loaded bank card, demanding US dollars.
"We are trapped between a rock and a hard place," she told the Zimbabwe Independent.
"What type of a currency is this? They said ZiG is not accepted. The exchange rate has increased on the black market, where we buy US dollars. I cannot buy US dollars there anymore; I will be left with nothing," she said.
At a hospital in Hurungwe, an elderly couple aimlessly wandered in the yard, after running out of solutions.
"The price of medicine has increased, I dont know what to do," the woman said.
"My husband suffers of a chronic ailment," she told the Independent.
It is outcries like this, which are pushing unions to spring into action.
ZCTU president Florence Taruvinga said the stark contrast between the official exchange rate and the informal rate engendered a challenging economic environment.
“Many workers may discover that their earnings yield even less value, exacerbating the prevailing economic crisis,” Taruvinga said this week.
“We strongly urge employers and the government to engage in urgent discussions aimed at recalibrating wages in accordance with the new economic realities. Workers should be empowered to fortify their unions and collective bargaining capabilities to negotiate improved terms and wages that can withstand inflationary pressures, which should be 100% US dollars.”
She said as markets adapted to the altered economic landscape, the cost of living would inevitably rise, further degrading the living standards of workers.
“Consultations of key stakeholders remain to be paramount. We recommend that the government explore stabilisation measures. While this devaluation presents substantial challenges for workers in Zimbabwe, proactive and strategic measures can significantly mitigate its impact. The ZCTU remains steadfast in its commitment to advocating for decent wages.”
Government has also dithered on increasing salaries of its workers, and many of them say they are finding it tough to survive.
They want unions to negotiate for a wage that give them better buying power.
ZCPSTU spokesperson David Dzatsunga said what was of critical importance was the black market as it could no longer be avoided.
“We wanted to find out what happened, especially since salaries have already been paid. When they go into this weekend, when they are shopping, prices would have seriously jumped. Their salaries have grossly been eroded.”
“Even the councils, everybody will just be benchmarking their costing against the US dollar. That is precisely what they will do. So, you know, people are going to be in a very tight situation financially,” Dzatsunga added.
