Why we beg to differ with President Museveni on permanent terms pronouncement

May 3, 2024 in Columnists, Editorial, Letters, Opinion by Editor

The highlight of President Museveni’s labour day address was the directive to employers to hire all workers on permanent terms. The muted applause, days since May 1, speaks to its inherent contradictions.

Permanent employment would be good from a socio-economic perspective, but its absence is not fundamental to labour welfare. Rather, it is the absence of a yardstick or standard for rewarding labour. For several years now, President Museveni has refused to assent to the Minimum Wage Bill. He has not explained his aversion to a minimum wage but speculation within labour circles suggests he fears it will stifle investment – and by extension job creation.

256 BN does not believe that establishing a minimum wage would equate to regulating the price of labour in a liberalised marketplace would violate the ethos of a free market. It would only be indicative of what should be the floor and not the ceiling of remuneration for contracted labour. Minimum wage rates are also practiced in the world’s major free market economies.

Casual employment is important in the labour market because it gives firms the flexibility to adjust to short-term or seasonal needs for labour. Forcing them to keep a headcount that is not aligned to output levels will make their products expensive and uncompetitive. Without adequate levels of profitability, firms will not expand or may actually fold, creating mass unemployment.

Casual employment also creates opportunities for youngsters to test the world of work. ALSO, requiring employment contracts in the absence of a standard or minimum wage, has the potential to trap workers in slavish working conditions.

That is why it is our conviction at 256BN that President Museveni should assent to the Minimum Wage Bill.