ALTERNATIVES TO NEO-LIBERALISM IN SOUTHERN AFRICA
A CASE OF THE LABOUR MARKET IN ZAMBIA
Grayson Koyi
1.0 Introduction
Zambia has a young and rapidly growing population of about 12.8 million people. Children (aged 0–14) represent roughly 45.3% of the population and young adults (age 15–24) about 21.5%. Admittedly, this population structure (with a significant economically active population currently places strong demands on socio-economic opportunities and services such as employment, livelihood creation, health and education services.
Managing such a complex demographic structure is, therefore, one of the key labour market challenges for Zambia presently and in the future. However, an investigation of the overall labour market policy thrust in Zambia suggests an absence of a sustainable and comprehensive framework to ensure employment and livelihood creation for all the (potentially) economic active populace. Beyond this demographic challenge is also the manner in which structural adjustment measures have cut a jagged line across the labour market in Zambia. Incidentally, following the implementation of structural adjustment programmes (SAPs) in the 1990s in Zambia, the role of the state in managing labour market processes as well as acting to mitigating undesired labour market outcomes has significantly diminished. This has led to a burgeoning of informal employment, alongside disturbing evidences of casualization and other atypical forms of employment. Wages and conditions of work, especially for public sector workers and the bulk of informal workers, have equally trended downwards, leading to a public outcry for a restoration of the dignity of work and for a more humane treatment of workers in Zambia. Besides, a number of workers, especially those in informal employment, have lacked guaranteed social security thereby exposing them to various vulnerabilities in old age once they are no longer employable.
Any alternative development framework that is human centred cannot be constructed without a strategy for the labour market. Labour remains a crucial element not only for productivity and economic growth, but also as a possible means for creating sustainable livelihoods, promoting equity in income distribution and poverty reduction (at best, elimination). Thus an investigation of the Zambian labour market and its policy and legislative framework will enable this study to draw a conclusion about how pro-poor and developmental this market is in the country. This study will also seek to reveal, through empirical evidence, how neo-liberalism in Zambia has not delivered on the developmental and growth targets within the labour market as was envisaged from the onset of SAPs. In this vein, it is important to appreciate how the forces of neo-liberalism have conspired to impoverish workers in Zambia and elsewhere in the world where such forces have been given free reign. This paper will also discuss the resulting labour market outcomes from SAPs and identify the areas of intervention.
The paper is organized as follows: the next section provides the conceptual and analytical infrastructure that informs the paper’s discussion. The third section provides the context within which the discussion is situated. The fourth section undertakes a historical survey and thus discusses the impact of structural adjustment programmes on the labour market in Zambia. The fifth section looks at the labour market today. Section six analyses labour’s social base, while section seven points to areas for intervention. The last section makes some concluding remarks.
2.0 Conceptual and analytical framework
2.1 Definition of key labour market concepts
The economically active population
In Zambia, the economically active population comprises all persons of either sex between the ages of 15 and 65, who furnish the supply of labour for the production of goods and services during a specified time reference (NELMP, 2004:9; CSO, 2007:8). This excludes full-time students, full-time housewives, prisoners, beggars and people who are retired, but includes the unemployed. In the Zambian context, and consequently in this paper, the concept of the economically active is used synonymously with the labour force. Figure 1 illustrates the conceptual framework of the economically active population in Zambia.
Employed population
The concept of the employed population is understood as comprising all persons who perform some work for pay, profit or family gain (CSO, 2007:8). This conceptualization follows the definition used by the Central Statistics Office (CSO) in the 2005 labour force survey were the employed population was used to include all persons, between the ages of 15 and 65, who had a job and would normally have worked for pay or profit or return in kind. It also includes those who are on paid or unpaid vacation or study leave, subsistence farmers as well as those who are temporarily prevented from working because of illness, bad weather, industrial dispute etc. Perhaps of important note is that the employed population in Zambia includes those in both formal and informal employment. Therefore, caution must be exercised in interpreting the employed population indicator, especially because informal employment and the decent work deficits associated with such employment has been on the rise. Similarly, the interpretation of the unemployment rate in Zambia must be seen in the context of how the employed population is understood and measured.
Employment-to-population ratio
The employment-to-population ratio is defined as the proportion of Zambia’s working-age population who is employed (CSO, 2007:8). Generally, a high ratio means that a large proportion of a country’s population is employed, while a low ratio means that a large share of the population is not involved directly in market-related activities because they are either unemployed or (more likely) out of the labour force altogether. What is acknowledged, however, is that this indicator alone is insufficient for assessing the level of decent work.
Unemployment
The unemployment rate is probably the best-known labour market measure. It tells us the proportion of the labour force who does not have a job and is actively looking for work. In the Zambian context, unemployment is defined as all persons above the age of 14 years who, during the seven days prior to the labour force survey of 2005, were without work, currently available for work, and seeking work (LFS, 2007:8)[1].
Underemployment
A related concept is that of underemployment i.e. those working for less hours (daily, weekly, or seasonally) than they would like or are engaged in work for which they are overqualified. In this paper, therefore, underemployment is broadly understood as "under utilisation of the productive capacity of the labour force" (LFS, 2007:8). The definition also includes all persons in employment whose hours of work are insufficient in relation to an alternative employment situation in which the person is willing and available to engage (LFS, 2007:8).
2.2 Methodology and data sources
The study used the inductive method of analysis. Inductive analysis begins with specific observations and builds towards general patterns (Moonilal, 1998:11).[2] The study was mostly qualitative using secondary data mainly. On this basis, the study methodology involved a review of important documents that shed light on the labour market in Zambia. This review was both general and specific to the Zambian labour market situation. The data sources included related books, articles, journals, pieces of legislation, policy documents, published and unpublished papers, documents from the libraries, and Internet databases in and outside Zambia. Most data on labour market characteristics was obtained from the Central Statistics Office’s recent labour Force Survey (LFS, 2007). Data on employment practices, wage setting and conditions of work was obtained from the Zambia Congress of Trade Unions (ZCTU).
3.0 An overview of key labour indicators under structural policies
3.1 An overview of the labour market in Zambia
The recent favourable economic performance in Zambia has not led to any reduction in unemployment levels. On the contrary, unemployment rates have increased during the period of relatively impressive economic growth, thereby raising troubling questions about the pattern of Zambia’s economic growth.
Income distribution has also remained skewed. According to the United Nations Development Programme (UNDP), Zambia is one of the most unequal societies in sub-Saharan Africa (UNDP, 2007:34). The Gini coefficient falls in the 0.50 to 0.60 range, which places Zambia with South Africa, Namibia, and Botswana as the most unequal in sub-Saharan Africa, and close to Brazil.
Total formal sector employment in Zambia is estimated at 495,784 while the active labour force is at about 4.1 million (LFS 2007:45). As seen from table 3 below, only about 12% of persons in the active labour force are employed in the formal sector, with the other 88% engaged in the informal sector. Also evident from the table is that informal economy employment is more common among females (94%) than males (83%). Table 1 further demonstrates that only 6% of women in the Zambian labour force have jobs in the formal sector.
Table 1: Proportion of labour force in the formal and informal sectors, Zambia
Sex/Residence / People
employed in formal sector / Percent share of formal sector / People
employed in informal economy / Percent
share of informal economy / Total
number of employed
All Zambia / 495,784 / 12 / 3,635,747 / 88 / 4,131,531
Males / 330,109 / 17 / 1,611,710 / 83 / 1,941,820
Females / 131,383 / 6 / 2,058,329 / 94 / 2,189,711
Rural / 60,388 / 2 / 2,959,033 / 98 / 3,019,421
Urban / 389,239 / 35 / 722,872 / 65 / 1,112,110
Source: Labour Force Survey (2007:45)
With the contraction of the formal sector, the informal sector has increasingly become the only sure source of employment in Zambia. In terms of average monthly earnings by industry, the agriculture sector is on the low side while the financial sector is on the high side. A summary of average monthly earnings by industry are depicted in table 2 below, while the distribution of the labour force by sector is shown in figure 2.
Table 2: Average monthly earnings by industry (Kwacha)[3], Zambia
Industry / All Zambia / Rural / UrbanAll Zambia / 293,621 / 127,652 / 540,961
Agricultural / 93,629 / 83,944 / 131,668
Mining / 985,854 / 190,967 / 1,034,035
Manufacturing / 387,553 / 145,107 / 459,549
Electricity, Gas and Water / 1,007,505 / 1,037,246 / 994,512
Construction / 462,607 / 221,004 / 520,448
Trade, Wholesale and Retail / 292,341 / 112,830 / 336,419
Hotels and restaurants / 273,910 / 138,843 / 290,613
Transport & Communication / 559,962 / 274,066 / 587,377
Financial / 1,218,723 / 302,385 / 1,326,748
Community Social Services / 820,354 / 687,392 / 847,207
Not Stated / 242,217 / 410,606 / 146,628
Source: LFS (2007:60)
Source: Labour Force Survey (2007)
3.2 Impact of structural adjustment programmes on the labour market
The impact of Structural Adjustment Programmes (SAPs) on the labour market in Zambia has been very telling. To help with this impact analysis, two concepts often used in the literature in industrial relations (pluralist and unitarist) are adopted. Accordingly, the tendency in industrial relations has been to pose human resource management and industrial relations as opposing – and indeed excluding – concepts. The pluralist school of thought sees employees and employers as two separate forces with interests that are essentially in conflict but which can be brought together through a variety of institutional and ideological mechanisms in a negotiated relationship in order to make a particular factory or office work. In this model, industrial relations is about policing that relationship and keeping the rather unstable show on the road.
The unitarist school of thought sees the world differently. In place of two legitimately separate constituencies, there is only one interest: that of the organization as a whole – one which is led and articulated primarily by those at the top of the organization.
Under SAPs, the labour market regulation framework which was premised on a pluralist model was replaced with one based on a unitarist model. The starting point of this impact analysis is therefore a paradox. Nevertheless, in discussing the impact of SAPs on the labour market in Zambia, one observes that the 1990s saw an unprecedented onslaught on the component aspects of the labour market. The following labour market outcomes can therefore be traced to the SAPs:
· The proportion of employees in trade unions fell as thousands of jobs disappeared from the union’s heartland i.e. the formal sector. During the 1990s, over 90,000 jobs from the formal sector disappeared as the economy shed off jobs in huge numbers.
· Industry wide wage-setting approaches and collective agreements diminished in importance and in some cases almost disappeared. Enterprise based bargaining assumed common place.
· Employers became freer from the official regulation of wages and thus were more able to offer the terms and conditions that they believed best suited them.
· Management prerogative in decision-making grew. Management strategies placed a greater emphasis on the devolution of responsibility to operating levels, dealing with individual employees, and the flexible utilization of labour. Consequently, there has since been an increasing stress on individuals and with the precepts of strategic human resource management in which the questions of policy in the field of employment flow from business priorities rather that being a motor force in their own right.
· The revised industrial law began to intervene much more directly and many previous practices, including legal industrial action, was effectively outlawed.
This represents a formidable list and yet the real scope of this transformation appeared to be in doubt, which led some commentators and impartial observers to maintain that collective bargaining still remained, directly or indirectly, the prime determinant of the terms and conditions of employment for the majority of people at work in Zambia.
Three principal sources of neo-liberal pressure leading to these labour market outcomes can be identified:
· Corporate strategy;
· The legislative framework;
· Economic influences.
The change in each of these areas and the interaction between them have been shaping the nature and functioning of the labour market in Zambia since the era of SAPs. The result is a subtle series of shifts, rather than "big bang" changes from one model to another. At present, the labour market in Zambia is clearly in a state of transition where the final destination of change is still open to question. The common theme is greater variety in arrangements and a greater choice in approach towards employee relations, wage determination and employment contracts.