Job Loss Fear

Textile, Clothing and Footwear industry claims any significant increase in minimum wage rate would be unsustainable.
23 Mar 2022 15:27
Job Loss Fear

Jobs in the Textile Clothing and Footwear Industry are at stake, should the National Minimum wage be increased by more than 12.5 per cent, says industry stakeholders.

Textile Clothing and Footwear Council (TFC) president Michael Towler, in a letter to the Minister for Employment Parveen Bala, raised the industry’s concerns.

Mr Towler said an increase in the national minimum wage rate exceeding 12.5 per cent would push the experienced worker rates up to $3.64 (on average), which would place the industry close to being unsustainable.

He also said their major concern was that TFC in Fiji was not priced out of existence.

“We compete on the world stage and our competitors in South and East Asia are currently priced lower than Fiji, with more productive work forces,” he said.

“We have worked very hard in the past two years of the pandemic to keep and service our customer base, mainly in Australia and New Zealand.

“If we are priced out of the market by a substantial increase in the national minimum wage then all our hard work over the past two years will be lost, and there is no doubt that we will see our industry in Fiji rapidly decline at best, or in a worst-case scenario our industry will cease to exist.”

He said the industry did not oppose, in any way, the need to increase the national minimum wage for the garment industry.

“It is our respectful submission that the national minimum wage rate for our garment industry be increased from $2.68 per hour to $3.02 per hour (an increase of 12.5 per cent) which is in line with current and forecasted CPI for the period 2017-2022.”

Should the Government not accept their submission and increase the minimum wage exceeding 12.5 per cent, Mr Towler said the industry would see a strong demand to increase all other higher wage rates in the industry, which would push up labour costs considerably.

“We will be then priced out of the international market and that will have a devastating effect on the future of the Garment Industry in Fiji.”

He also stated that the industry required the retention of the training wage rate of $2.32, or any increase to be limited to 12.5 per cent, that is, $2.62.

“Our industry spends both time and money on training many of our staff and until a trainee can perform at a productive level which is mostly after three months, the industry needs to be able to pay these trainees a rate lower than the national minimum wage.”

He concluded that the industry was an important foreign exchange earner for Fiji, with 90 per cent of the garment industry was for export.

“It is an impending loss to Fiji due to much higher, uncompetitive wage rates that will not only have an impact on employment in Fiji but also on our foreign exchange reserves.”




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