Crosbie Walsh
"Nobody ever claimed the market economy would produce social justice." Joseph Stiglitz, American economist and Nobel Prize winner.
The Interim PM has overruled two recently announced Government decisions that would have helped the poor. His move has raised questions about his commitment to social justice and his army-style of leadership.
Responding to an employers' argument that this is not a good time to increase wages because of the floods and world economic crisis (and the intended-to-scare threat that 3,000 jobs could be at stake) he has delayed the increases until July. The bus fare reduction was reversed because of an earlier removal of subsidies to bus companies.
The move has been criticized by Labour Party leader Mahendra Chaudhry, chairman of the Wages Council, Fr Kevin Barr, and most significantly by the writer of the otherwise totally pro-government blog IG (see ig.blogspot.com), and comes on the eve of an announcement on Bainimarama's back leave payment, reported to be in excess of $180,000, accumulated over several years. USP's Anand Chand, however, "expected" the reversal and thinks the deferment could extend beyond July because, to compete internationally, Fiji has to keep minimum wages low, even below the poverty level. [This may be but many manufacturers did not help their case by refusing to disclose earnings to the Wages Council.]
Whatever the economic realities, Bainimarama's wage decision raises many questions about his credibility on other matters: What happened to his championship of social justice and help for the poor? Why has he succumbed so easily to business interests? Will it be the "right time" in July? This was an Order on minimum wages, not all wages. How do decisions like this differ from those of the Qarase Government? Why has he ignored his own advisers and made clowns of his ministers? How many supporters will leave his cause? Can he be trusted? Is this another example of a broken "promise"? Is he really a dictator? [My advice to the Interim PM? You need to reverse gear quickly and make a sharp U-turn to avoid running over many ordinary citizens.]
Comment on FEF Statements.Speaking to the Fiji Employers' Federation (FEF) on wage rates, Max Underhill of Maxumise (Fiji) Ltd was correct in saying not all employers paid unjust wage but he was wrong in thinking unemployment, and not low wages, was the greater cause of poverty. “I want to see less sweeping statements," he said, "and lots more facts behind what’s actually happening. Who knows, there may be some problems that we really need to address.” May be (sic!) -- with minimum wages well below the poverty line? Wages Council chairman Fr Kevin Barr said low wages were the major cause, and this is backed up by all available information on urban poverty.
Textile manufacturer Kalpesh Solanki, also speaking at the FEF meeting, thought the official unemployment rate of about 4% is too low. Real unemployment is notoriously difficult to establish in less developed countries, even with the most sophisticated research. He thought/guessed unemployment is closer to 30-40% (which presumably includes the semi-subsistence and rural areas).
I doubt it, but even if employers knew the "real" unemployment rate, how would this lift minimum wages? With an even greater "reserve army" of unemployed, all looking for jobs, unscrupulous employers could offer even lower wages!
Underhill and Solanki's shift of the discussion from low wages to unemployment levels seems to be a disingenuous way to shift responsibility and beg the question. Their attention should shift back to their fellow employers who do pay unjust wages (remembering that the Order is about minimum wages), to researching profits, and the extent to which FEF members' average incomes exceed those of their lowest paid workers. My "thought/guess" is 20-30 times, and then some. Afterall, competitiveness would also be increased by salary cuts!
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