Minimum wage

The government of Malawi set the minimum wage at 52,000 Malawi Kwacha (27 EUR) per month, both for rural and urban areas.^[1] Although there is a government mandated minimum wage, a large percentage of the population works in the informal sector, meaning that these rights are not ensured for a large part of the workers. In Malawi is estimated that 88% of the working population are employed in the informal sector.^[2] In rural Malawi, where the majority of the population resides, only 6% of workers are waged or salaried, and three quarters of the workers are subsistence farmers.^[3] Lack of income and low employment opportunities in rural Malawi have created an environment in which citizens are willing to work for low wages.^[4]

Living wage

The Global Living Wage Coalition benchmark estimates the living wage for rural Southern Malawi to be 164,872 Malawi Kwacha (88 EUR) per month.^[5] This estimate is based on a family of 5 with 1.59 full time workers. The study is focused on a tea growing region and provides context of wages for workers on tea estates, as these are among the few formal jobs available in rural Malawi. Tea states are concentrated in the Southern region of Malawi and are estimated to employ some 50,000 workers. The wages that tea workers receive are typically higher than the government established minimum wage, which makes tea estates essential drivers of the rural economy. Still, current wages of tea workers are well below the estimated living wage.^[6]