Business Botswana opposes the immediate implementation of a P4,000 minimum wage, citing potential job losses and increased operational costs. Only 32% of businesses support the move, especially SMMEs. They recommend a phased increase over four years and urge for comprehensive research on its socioeconomic impacts.
Business Botswana has expressed strong opposition to the proposed minimum wage of P4,000, asserting that its immediate implementation could significantly harm businesses and lead to job losses. Representing approximately 2,500 businesses, the organization urges the Minister of Labour and Home Affairs to rethink the timeline for this wage increase.
According to research conducted following a summit in Gaborone, only 32% of businesses supported the immediate wage hike, particularly among small and medium-sized enterprises (SMMEs) that showed considerable resistance to the proposal. Concerns were raised regarding rising operational costs and potential inflation that might arise if wages are raised abruptly.
The organization highlighted that sectors reliant on low-wage labor, such as manufacturing and agriculture, would struggle to cope with the increased costs. They proposed a phased increase over four years: year 1 at P2,500, year 2 at P3,000, year 3 at P3,500, and year 4 reaching P4,000 to allow businesses to adapt their budgets.
Moreover, Business Botswana advocated for tailored implementation strategies for various sectors that depend on low-wage labor. They called for thorough economic research on the ramifications of a minimum wage increase, focusing on employment levels, business sustainability, and consumer price effects. This data is deemed essential for informed decision-making.
The business representatives underscored that while higher minimum wages could elevate production costs for employers, it risks reducing employment unless accompanied by increased productivity. Manufacturers also pointed out their vulnerability against cheaper international products, suggesting that this wage increase would put them at a strategic disadvantage.
Additionally, they warned that some businesses might resort to technological automation, replacing human labor, exacerbating unemployment which is currently over 34% and disproportionately affecting the youth. In related remarks, the Minister for Technology and Innovation controversially suggested that businesses unable to sustain the P4,000 wage should shut down.
In conclusion, Business Botswana maintains that the proposed increase in the minimum wage to P4,000 poses significant risks to businesses, particularly small and medium-sized enterprises struggling with operational costs. They recommend a phased approach to the wage increase over four years and emphasize the need for comprehensive research on its economic impact. The threat of potential job losses and increased reliance on automation remains a critical concern for the business community as they navigate competitive pressures.
Original Source: thevoicebw.com
