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WHAT BUDGET MEANS TO YOU-Justification Behind Wage Increase

WHAT BUDGET MEANS TO YOU-Justification Behind Wage Increase
Sugarcane farmers happy with the recent Budget announcement on sugar on June 30, 2017. Photo: Charles Chambers
July 01
11:00 2017

Minimum wage rate for unskilled workers around the nation has been increased from $2.32 to $2.68 per hour.

This rate is only for unskilled workers and also for those who are not part of the 10 sectoral-based Wages Councils. These employees in the 10 sectoral-based categories have much higher rates but they will also get an increase in their minimum rates.

While announcing the increase during the 2017-2018 budget address, Minister for Economy and Attorney-General Aiyaz Sayed-Khaiyum stressed the need to strike a balance.

“Those who advocate an arbitrary minimum wage rise for the unskilled workforce are clearly trying to gain political mileage,” Mr Sayed-Khaiyum said.

“We prefer a responsible approach, a sustainable approach, one that serves the wage earners and the public good. It is an affordable rate based on productivity improvements,” he said.

“It is responsible and based on sound economic thinking and a desire to help as many people as possible without causing disruptions in the economy. Raising the minimum wage rate too much would actually cause a loss of jobs. We must also be mindful of the inflationary impact of wage increases,” he said.

This wage rate was after a thorough examination of many competing factors and extensive consultations. It also took into account the impact of Government policies, in particular, for low income families such as free education, free medicine, subsidised bus fare, subsidised electricity, free water, scholarships and the Tertiary and Education Loan Scheme (TELS).

“When we considered raising the minimum wage, we could not overlook the people who are self-employed or work in the informal sector. They are approximately 130,000 people, 130,000 Fijians, who drive taxis, own micro-enterprises, sell in the markets or on the roadsides.

“The increase in the minimum wage does not help them; in fact, it could raise costs of goods and services for them, and they have no way to offset these costs. Raising the minimum wage too much would do them great harm.

“A responsible government must be concerned with the effects of a wage rise on everyone in society and try to do what benefits the most people and disadvantages the fewest. And that is what we have done,” he said.

However, as we have seen, the strong economy is naturally pushing wages up in several areas.

Some workers whose set minimum wage rate is set at $3.50 an hour are being paid $7, and other workers—electricians, for example—have seen wages rise from $4 an hour to as much as $12.

“So the prospect for wages in this economy is good.”

Edited by Karalaini Waqanidrola

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