Trader’s perceptions towards the minimum wage bill in Uganda: a case study of Kikuubo market, Kampala city

Abstract

The International Labour Organization’s Minimum Wage Fixing Convention 26 compels Uganda as one of its partner states to set minimum wages for her citizens. In this regard, the Parliament of Uganda passed the Minimum Wage Bill 2015 on 20th February 2019. To establish readiness, a study was conducted to examine the perception of traders in Kikuubo Market towards the minimum wage bill 2015 for Uganda. Specifically, the study examined the knowledge and attitude of traders towards minimum wage payment, the impact of minimum wage on traders; as well as the policy implications of the minimum wage bill on the economy of Uganda. The study adopted a cross-sectional research design and collected both quantitative and qualitative data from a sample size of 369 out of 435 traders (employers and employees). The study population included traders, Kikuubo Market leaders, Kampala City Traders Association (KACITA) leaders, and Kampala Capital City Authority (KCCA) staff. Purposive and simple random sampling techniques were used in the selection of study respondents. The study mainly used a questionnaire survey, interview and document review methods to gather data for this study. Quantitative data was analysed by computing descriptive statistics using IBM SPSS 26 software. On the other hand, qualitative data was analysed using thematic and content analysis techniques. The study results show that the majority of traders (73.8 per cent, 265/359) in Kikuubo market have ever heard about the minimum wage bill 2015 for Uganda. The main sources of information about the minimum wage bill 2015 in Uganda for the traders in Kikuubo market are newspapers (31.0 per cent), television (30.5 per cent) and radio (29.5 per cent) respectively. The majority of the traders indicated that they were willing to pay minimum wages (74.7 per cent, 268/359). However, traders indicated that they would comply with the Minimum wage bill 2015 for Uganda if it is a government directive (46.1 percent). The traders advanced that they would be reluctant to comply with the minimum wage bill 2015 because they could not afford minimum wages (58.2 per cent, 53/91) followed by those who decried high government corruption (19.8 per cent, 18/91). The majority of the traders indicated that the minimum wage bill in 2015 is likely to lead to unemployment (39.9 per cent). However, others reported that the minimum wage bill will lead to the employment of skilled workers (7.6 per cent). Few respondents (31.2 per cent, 112/359) indicated that minimum wage payment will reduce poverty among workers in Kikuubo market Kampala city. Also, the minimum wage payment will impact the economy of Uganda by increasing tax revenue (26.6 per cent). In conclusion, the level of knowledge about the minimum wage among traders in Kikuubo market Kampala city is quite high and hence have optimism to pay it if the government puts the necessary arrangements in place. The study therefore recommends: incentives such as tax holidays to traders, sensitization of both traders and employees, hiring of adequate labour officers to enforce payment of minimum wages, and creation of strong trade unions to bargain for better salaries above the minimum wages amongst the labour force stakeholders.