As Uganda grapples with one of its most pressing challenges of high unemployment rate, its labor market continues to struggle. The country’s youth, many of whom are highly educated but underemployed, are facing a harsh economic reality: a vicious cycle where unemployment drives down salaries, perpetuating poverty and insecurity for the working class.
The education sector is one of those deeply impacted by low wages. Raymond Ulela, a secondary school teacher in Mbarara, sheds light on the fierce competition for jobs that affects salary negotiations.
“In Uganda, there are so many students graduating and competing for the same positions. In teaching, for instance, many are vying for the few openings available. If you’re not careful, you lose your job to someone else,” says Ulela.
His sentiments are shared by many, especially in fields with an oversupply of graduates. The fear of losing a job or not securing one at all often forces workers to accept low wages simply to avoid unemployment.
Ulela recounts a period where he went for four months without pay, only to face allegations of misconduct, which he believes were fabricated to cover up the school’s failure to compensate its staff. “Exploitation is everywhere. It’s a system that takes advantage of workers who have no option but to endure,” he laments.
According to Twaweza’s Sauti za Wananchi survey of 2023, 48% of Ugandans identify unemployment as one of the top national concern, with 45% admitting that it’s a major worry in their households.
The Uganda Bureau of statistics reveals that 75% of Ugandans earn less than UGX 250,000 (USD 67) monthly.
The concept of a minimum wage in Uganda is a contentious one. Although the government set a minimum wage of UGX 130,000, many argue that this figure is outdated and inadequate in today’s economy.
Jessica Mwijuka, the workers’ counselor for Mbarara City emphasizes that the current minimum wage law fails to reflect the actual cost of living. “It’s too low, and it doesn’t provide workers with the necessary bargaining power for better wages,” Mwijuka states.
She believes that a general minimum wage, if implemented, would provide a base for wage negotiations across sectors. However, she also cautions that it could have unintended consequences, potentially disrupting wages in sectors where workers are already paid well above the minimum.
The National Organization of Trade Unions (NOTU), is actively lobbying for a more comprehensive minimum wage law. Mwijuka who is also NOTU’s Deputy Secretary General advocates for collective bargaining agreements (CBAs) within different sectors, allowing workers to negotiate wages that reflect the unique challenges and needs of their industries.
Mwijuka adds that informal workers, especially in sectors like retail, construction, and hospitality, are also heavily affected by low wages and poor working conditions.
“The majority of Ugandans work in the informal economy, and they are often not protected by labor laws. They are the ones who bear the brunt of low wages,” she explains.
Employers in Uganda, like Isaac Muzoora, Managing Director of Shark Moor Business Solutions, argue that the current wage dilemma stems from the oversupply of labor and the resulting competition for jobs.
With too many qualified candidates vying for limited positions, employers can offer lower wages, knowing there will always be someone willing to take the job. This trend puts even skilled workers at a disadvantage, as employers can afford to offer low salaries without fearing an exodus of talent.
However, Muzoora stresses that businesses must balance empathy with affordability when determining salaries. “Employers need to put themselves in the shoes of their employees, understand their needs, and ensure that wages reflect the reality of living costs,” says Muzora.
Moreover, he believes that reducing the cost of doing business through favorable government policies would help employers increase salaries and improve working conditions. When businesses thrive, so too do the workers, creating a more sustainable and equitable economy for all.
In Mbarara, efforts are being made to address low wages and improve working conditions. Phillip Amanya, the Labor Officer for Mbarara City, mentions that the city has set up local minimum wage laws to address the issue. While Uganda’s national minimum wage law is still under discussion, these local laws aim to protect workers in the absence of a national standard.
“The government has made some efforts to improve public sector wages, particularly for teachers, healthcare workers, and civil servants. But these efforts are often inconsistent, and more needs to be done,” Amanya states
In addition to local wage reforms, there have been initiatives aimed at promoting youth employment. Finance Minister Matia Kasaijja says programs like the Youth Livelihood Program and the Parish Development Model are intended to empower young people and provide them with the skills and financial support needed to find employment. However, the minister points out that many youths remain disengaged from such programs, resulting in continued high unemployment levels.
Uganda’s low-wage epidemic is a complex issue driven by high unemployment and outdated wage policies. While efforts to improve wages and working conditions are ongoing, much more needs to be done to create a fairer labor market. Only through comprehensive reforms, effective government-private sector collaboration, and strong union advocacy can Uganda hope to break the cycle of poverty and ensure that all workers are compensated fairly for their labor.