NEWS

$3.45-$3.65 an hour for minimum wage rate proposed

Professor Gangopadhyay, who recommends the increase from $2.80 an hour, says it’s realistic to all stakeholders, Em-ployment Minister Bala: It’s just the professor’s recommendation, FTUC: General Secretary Felix Anthony declined to comment, Employers Federation: We will wait for Government to make a decision
04 Mar 2022 11:22
$3.45-$3.65 an hour for minimum wage rate proposed

There have been mixed reactions from major stakeholders on a proposal by Professor Partha Gangopadhyay, who recommends Fiji’s minimum wage to be between $3.45 to $3.65 an hour.

The current minimum wage rate is $2.80.

He said the proposed rise would be realistic for all stakeholders.

The recommendation was presented during a public consultation, on the national minimum wage and wages regulation at the Sigatoka Town Council Mayoral chamber on Wednesday,

Professor Gangopadhyay proposed that the National Minimum Wage rate be between $3.45 and $3.65.

The Minister for Employment Productivity and Industrial Relations, Parveen Bala, said: “What he is saying is the report that he did, we had to put on hold because of COVID-19 so what we are saying is to stick to this report.

“It’s not about me being happy it’s just his recommendation,” the minister said.

Fiji Employers Federation chief executive officer Kameli Batiweti was hesitant to make a comment on the proposal.

“We will wait for Government to make a decision. To comment now would be pre-emptive. We would rather not comment,” he said.

Fiji Teachers Union general secretary Agni Deo Singh said: “Felix Anthony will be the best person to comment, but this does not affect teachers.

Fiji Trade Union Congress general secretary Felix Anthony refused to comment despite calls and a visit made to his office

The 2021 – 2022 national minimum wages

Professor Gangopadhyay said he understood that the 2020 Fiji Agricultural Census showed a serious spike in rural poverty, especially in the informal sector, because of the pandemic.

“I recommended the national minimum wage to increase to $3.45 in 2020 (based on inflation rates and minimum wage rate\). I also recommended adjusting the minimum wages in other sectors as per the change in the wage adjustments rules,” he said.

He said if for any sector, say the garment industry – the wage increase was less, a lower wage increase was caused by a slower productivity growth in this sector. This is an implicit carrot-stick policy created by an artefact of wage determination in Fiji.

“To have a larger increase in wages in a sector, employees will need to increase their sectoral\productivity,” he said.

Given the recommended national minimum wage of $3.40 in 2020, he said, based on the economic situation of 2020, he proposed to adjust the National Minimum Wage.

“The proposed national minimum wage in 2022 (NMW 2022= 0.7 *$5.25 = $3.65. On the following, I offered the justification of the proposed NMW 2022 to be between $3.45 to $3.65,” he said.

“10 different sectors and wages in 174 sub-sectors were considered.

“Out of the 174 sub-sectors 55 sub-sectors wages are changed to the national minimum wage. For these 55 sub-sectors wages are changed to the national minimum wage.

“For these 55 sub-sectors, stipulated minimum wages are taking into account inflation and productivity growth fell below the new NMW. For the other 119 sub-sectors, we recommended individual-specific minimum wages.”

 

Further work necessary in 2021 – 2022

For 2021, he recommended the data of 2020 Fiji Agricultural Census be combined with a targeted survey of informal sectors rural as well as urban in Fiji to extract more detailed data on the poverty dynamics, especially since 2019.

 

By using the data base, he said it would be possible to recommend a more comprehensive labour market policy including the national minimum wage policy for 2023 and beyond with the goal being to reduce poverty in the informal sector of Fiji and to boost consumer spending domestically.

 

About Professor Gangopadhyay

Professor Partha Gangopadhyay is economist and Associate Professor of the Western Sydney University in Australia. He was previously engaged during the initial stages of the National Minimum Wage Review in 2019 prior to the pandemic.

Professor Gangopadhyay’s academic qualification include a PhD from the University of Sydney.

According to the Western Sydney University website Professor Gangopadhyay is the co-creator and editor-in-chief of International Journal of Development and Conflict (IJDC) and has held chair professorships, also visiting professorships at leading universities of the world such as EUV (Frankfurt, O), State University of New York, Boston University, Indian Statistical Institute, JNU, Delhi School of Economics among others.

He led a multi-country policy centre, as its inaugural director, crafting policies to create and fuel sustainability in the South Pacific.

He is also the current Chair of Economists for Peace and Security (EPS), Australian Chapter.

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