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Minimum wage to positively impact informal economy

Minimum wage to positively impact informal economy

The introduction of the national minimum wage should be viewed as a positive move toward bettering the livelihoods of workers, including domestic workers.

This is according to Ministry of Labour, Industrial Relations and Employment-Creation’s spokesperson Maria Hedimbi.
She spoke to Nampa following statements by the secretary general of the Namibian Domestic and Allied Workers Union (Ndawu), Nelly Kahua, in an interview with Desert Radio.

Kahua voiced concerns about the potential job losses for domestic workers due to the increase in the minimum wage.

“Economic disparities between employees and domestic workers vary in terms of the income gap, as most domestic workers earn much lower wages than their employers. The minimum wage for domestic workers in Namibia is currently N$9.03 per hour and N$1 564.39 per month for full-time workers, which is not sufficient to provide a decent standard of living,” Hedimbi said.

She added that the minimum wage increase is being implemented in hopes of leading those affected to gain financial security.
She said domestic workers must be paid N$12.02 per hour in 2025, N$15.01 per hour in 2026 and N$18 per hour in 2027.

“It is anticipated that the informal economy will be positively affected, as wage increases may contribute to improved spending by consumers,” she said, further noting that the implementation will help Namibia reduce poverty and inequality by setting fair wage standards, and promoting equitable economic opportunities for all employees.

She added that Namibia faces many challenges that can compromise the full implementation of the minimum wages. These include inadequate financing and staffing that leads to insufficient monitoring. However the International Labour Organisation is ready to assist Namibia technically with strengthening the enforcement.
-Nampa