Analysis of the Gap Between Full-Time Work and a Living Wage in Zambia

Abstract

Despite consistent statutory minimum wage adjustments in Zambia, the phenomenon of the working poor remains prevalent, challenging the assumption that full-time employment guarantees economic sufficiency. This study investigates the gap between formal employment and a living wage, operationalized as the lived experience of financial security. Using nationally representative data from Afrobarometer Round 10 (N = 1, 197), this study employs a two-steps Ordinary Least Squares (OLS) regression to isolate the effect of employment from demographic confounders. The results reveal that while full-time employment is a robust predictor of financial security (B= 0.633,  p < 0.001), the employment premium explains less than 10 percent of the variance in financial outcomes (R2 = 0.083). This suggests that over 90 percent of financial insecurity is driven by structural factors; such as inflation and high dependency ratios, rather than employment status alone. Furthermore, it finds no statistically significant Urban Advantage (B= 0.042,  p> 0.05) once employment and education are controlled for, indicating that the high cost of urban living effectively neutralizes the benefits of city residency. The study concludes that access to full-time employment is a necessary but insufficient condition for achieving a living wage in Zambia. Policy interventions must therefore look beyond job creation metrics to address the purchasing power of wages and the specific cost-of-living burdens in urban centers.