Dollarisation: its impact, how did we survive?

Wage and cost of living comparisons.

But the only available figures since then look distinctly funny. LEDRIZ has some figures for the period up to May2010, which is no further behind than these statistics usually are, but I have to assume that their sudden jump in the average minimum wage to $410 is in fact a mistake for $140. This does not mean that the minimum wage has dropped. It may just mean they decided they cannot calculate the average minimum wage and more accurately than this. That means they are saying we can be sure it is between $135.01 and $145.00 but we can’t be more exact than that. This is a reasonable thing to say, because an ‘average minimum wage’ is a very slippery concept. Since nobody knows how many workers are formally employed, it is easier to take the average of the known minimum wage for each sector of the economy. If each sector employed the same number of workers, this would give the same answer as taking an average of the wages of every worker. They are not all equal, so so the average minimum given here is not exact. We do not know how many workers there are in formal employment, so we cannot calculate the correct figure. What you have here is the best we’ve got.
Having said that, I take the liberty of using the November and December figure from the table above as the minimum wage up to May. This does state one truth: the average minimum wages in industry have not changed significantly since last November. They haven’t increased noticeably (certainly not to $410, a 188% increase) and they didn’t suddenly drop by $2.46 (1.7%) in January. Then the table above continues like this:

and since this has the virtue of matching our memory of what has happened to the money in our pockets since last January. This extended table says that in April we had slipped back to where we were late in June 2009. We will probably agree that we were slipping back. We have no better measure of how far or how fast we were slipping, so this is at least an expression of how we feel things were going.
There is another problem with the figures. Between January and February 2009 it is difficult to get continuity between figures in the incredible vanishing zimdollar and those in real money, whether you use US$, rand, pula or renminbi yuan. The change brought some sense back into the system. Our wages could buy something again. Beyond that, the figures are not clear. Could prices drop by 36% and wages rise by 47% when we simply translated both from Z$ to US$? That is one of the mysteries of hyperinflation economics I don’t understand. Nor, I suspect, does anyone else.
What we do know is that we could once again plan how to spend our money. Our family budget made sense and that was an improvement. Let’s just say we suddenly becameap better off; whether by 50% or 100% doesn’t matter or mean much.
A very dubious figure in the table above is the “Food Poverty Line”. Now, it should be possible to calculate the cost of feeding a family the minimum needed for survival: that would be a “Food Poverty Line”. Unfortunately, the CSO don’t think that way. They si,mply choose to call food costs 36.8% of the total “Poverty Datum Line”. We know this is nonsense, because we know the poor spend more of their income on food than the rich do. CSO used to know this: in the pre-1980 European Consumer Price Index, food accounted for about 20% of the expenditure that made up the Consumer Price Index(CPI), while food accounted for about 55% the African CPI. This distinction was kept, with slightly different figures, in the “upper income” and “lower income” CPI calculations used until ESAP dictated that we should not be interested in distribution of the nation’s wealth or expenditure, just in its overall size. But we are interested in the distribution, unless we get such a big share that we never feel hungry.

How did we survive?
“How did we survive the years of economic depression and hyperinflation?” The International Fund for Agricultural Development, a UN agency dedicated to eradicating rural poverty, estimated that $361 million came into Zimbabwe as remittances in 2008 and this could easily double in 2009. Eddie Cross reckoned the total might be a billion, which is far more than anyone had expected. If this much was coming as remittances, it would explain how people survived. Otherwise, we’d have expected to see more people die of hunger and disease than actually did in these recent years. Maybe. Or maybe more did die than we heard about. Population figures have been unreliable at least since the results of the 2002 census were quietly stuffed away in a dusty closet and forgotten. That census gave the population of Zimbabwe in August 2002 as 11.3 million. This was about what we should have expected from the 1997 intercensal survey which showed that the population growth rate, which had dropped from 1982 to 1992, was still dropping, as we would expect with HIV?AIDS still spreading. In fact Timothy Stamps, then Minister of Health, stated about the end of 2001 that birth and death rates had equalised. Allowing that the flood of emigration had already started, this meant that the population was already decreasing in 2002. We have no evidence of any change in those trends, so it is hard to claim realistically that we now have more than 10 million people living in the country.