Wage increases – good but not good enough Fr Kevin Barr, Suva Much publicity was given to the recent wage increases for our workers. But let us be very honest
05 Jul 2015 13:03

Wage increases – good but not good enough

Fr Kevin Barr, Suva

Much publicity was given to the recent wage increases for our workers. But let us be very honest about the National Minimum Wage and the other small wage increases published in the last few days.

Over a year ago Dr Mahendra Reddy (after extensive research) proposed that the National Minimum Wage should begin at the rate of $2.32 an hour and be regularly increased each year. Mr Hazelman (representing the Fiji Commerce and Employers Federation) announced publicly that the Federation had intervened with Government to have the National Minimum Wage reduced to $2.00 an hour. Our new Government is now restoring the National Minimum Wage to its originally proposed rate of $2.32. In truth, if the employers had not intervened, the National Minimum Wage for July this year should now be at least $2.55 or more. But even that would not be sufficient. As many have stated the National Minimum Wage of $2.32 is a joke and totally inadequate in view of the current cost of living.Yet, of course, the National Minimum Wage will benefit to some extent those 10 per cent of workers (such as domestic workers, gardeners etc) who are not covered by the Unions (about 30 per cent) or the Wage Regulation Orders (about In principle the National Minimum Wage should be measured according to the Basic Needs Poverty Line (or the current cost of living) which is probably at least around $4.20. FIBOS can tell us the exact figure. Again the increases given to those workers in the ten industries covered by the Wage Regulation Orders are minimal. Representing the increases by giving percentages is an old trick and very deceptive.

It sounds impressive to read that the wage of a particular industry has increased by 4 per cent. But, if the previous wage was $2.50 an hour it means that in real terms the newly increased wage will only be $2.60 an hour – a miserable increase of only ten cents an hour.

I am open to correction but I am told that there has been no significant increase in the Wage Regulation Orders for at least two years.

We are told that: “The increases in the Wages Regulation Orders is based on a formula Agreed to by the Employment Relations Advisory Board and takes into account the Consumer Price Index and other figures on how each industry is faring to calculate the increases”. Yet Fiji should be following not its own formula but the criteria for Wage fixing established in accord with the ILO Convention to which Fiji is a signatory. Its principle criteria is the current cost of living in the country (which is represented by the Basic Needs Poverty Line) but takes into account other issues as well. If you begin with a low unjust wage and increase it only by the current Consumer Price Index you will still have a low unjust wage.

Unfortunately in recent years “productivity” has been highlighted by some influential people as the major criteria for wages. But how can you expect workers to be more productive unless their basic needs in terms of housing, nutritious food, education and health care are being met for themselves and their families?As the 1997 UNDP Fiji Poverty Report stated clearly, low wages is one of the major reasons for the high degree of poverty and hardship in Fiji. We should be ashamed of ourselves for allowing this situation to continue. We are constantly being informed about the great increases in economic growth in the country but the benefits of this economic growth are not shared. The old “trickle down” theory is now recognised as a myth and the so-called “socialresponsibility” of many of our employers (not all) revolves around sponsoring sporting events, fashion parades or tourism extravaganzas – not a just living wage for their workers.

Our successive Governments have agreed to implement the policies of the World Bank and the International Monetary Fund which we are told will increase economic growth. Yet at the Economic Forum held in Davos earlier this year it was agreed that the policies of these International Financial Institutions (IFIs) had produced a frightening increase in poverty and inequality all around the world.   When will we wake up? Yet we have actually invited the World Bank to analyse the results of our most recent Housing Income and Expenditure Survey. How really credible and reliable will their results be? Government has never acknowledged that the 20 per cent devaluation of our currency in 2011 meant that food costs increased by 36 per cent and building costs by 29 per cent (according to the Bureau of Statistics). Then this was followed by an increase in VAT by 2.5 per cent which, because it is a regressive tax, affects the poorer sector of our nation more than the rest. All this occurred while wages did not increase significantly. Of course in all this we followed the recommendations of the IFIs. It is about time we “stand up to the big boys” as our honourable AG once suggested in another context. Of course Government has done well in reducing education costs, providing scholarships and pensions and free health care and water for families on low incomes and assisting housing for the poor. These are laudable achievements and are most welcome but they are no substitute living wage.

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