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$5/hr Minimum Wage Is Unrealistic, Says A-G

$5/hr Minimum Wage Is Unrealistic, Says A-G
Biman Prasad outside Parliament on July 11, 2017. Photo: Ronald Kumar
July 12
13:21 2017

The suggestion by National Federation Party leader, Biman Prasad outside the Parliament to increase minimum wage to $5 is unrealistic.

There are reasons as to why a $5 minimum wage increase will be catastrophic.

In his explanation in his right of reply, the Attorney-General and the Minister for Economy, Aiyaz Sayed-Khaiyum said, there were 130,000 Fijians who were self-employed.

Not all business proprietors could afford to pay $5.

“The person selling coconuts by the road side, the five dollars minimum wage is not going to affect him or her, 130, 000 people earn their living that way,” Mr Sayed-Khaiyum said.

How will they give themselves a five dollars pay rise an hour, is everybody around them getting that the cost of that increase will pass on to these people? He asked.

Current subsidies supplement minimum wage rate

The current Government subsidies have been effective tools in fighting poverty as it has decreased work poverty by nearly 70 percent.

It supplements the minimum wage rate in other words.

Therefore, the new minimum wage rate from $2.32 per hour to $2.68 per hour was to empower the most marginalised in the country for the majority of which work in the informal sector.

According to the 2016 International Labour Organisation, figures revealed that in Fiji, 60 per cent of the working populations were in the informal economy.

These increases in individual take home pay, will result in an increased buying power and an increased contribution to economic growth.

The Minister for Employment Productivity and Industrial Relations, Jone Usamate said there was an increase in the wages for ten wage sectors.

These sectors he said comprised of building, civil and electrical engineering trades, hotel and catering services, manufacturing industry, mining and quarrying, printing trades, sawmilling and logging industry, security services, wholesale and retail trades, the garment industry and the road transport industry.

Mr Usamate explained that was possible following a comprehensive exercise of a nationwide survey involving 81 enumerators under the guidance of consultants.

Consultation was also done with the Employment Relations Advisory Board and all submissions were considered.

“We have not simply implemented a wage that would not be unsuitable we have done all the necessary work before implementing a sensible wage increase that gives credit to the role of a social wage,” Mr Usamate said.

In fact, from the recent wage increase exercise it was discovered that the social wage under the current Government of free education subsidised medicine, subsidised bus fare, subsidised electricity, a scholarship is an effective tool in fighting poverty as it can decrease working poverty by nearly 70 per cent, Mr Usamate added.

Mr Sayed-Khaiyum also reminded the Opposition that it was only the Bainimarama Government that introduced minimum wages.

“Today (yesterday), the NFP leader, Mr Prasad refused to comment on how much an hour he is offering for minimum wages.

He is on record outside Parliament saying five dollars an hour.”

“When we pushed him to say what would be the rate he did not say anything,” Mr Sayed-Khaiyum said.

“My point is this is so unrealistic. The Honourable Minister for Labour has already stated the reasons as to why a five dollars minimum wage increase will be catastrophic,” he additionally said.

Edited by Ranoba Baoa

Feedback:  arishma.narayan@fijisun.com.fj

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