Tuesday, 6 October 2015

The Minimum Wage: Challenges to Government

What is too often overlooked by employers and governments is that poor wages on which workers can barely exist can increase their costs. It is not simply a question of justice; it is often a matter of economic good sense. 

Poor wages are not only unjust as Fr Barr rightly claims in this article; they can also result in poor productivity, through absenteeism, accidents and poor work ethics, that reduce employer profits, and a poor use of a nation’s human resources that can result in  poor health, poor education outcomes, an increase in crime, domestic violence and prison incarcerations, and higher costs for governments. 

If the new government in Fiji has really created a “new start” for Fiji, and in many ways I think it has, it needs to re-examine employment orthodoxies by engaging independent researchers to research the real costs of poor wages. 

If Frank  Bainimarama and Aiyaz Sayeed-Khaiyum, the two principal cabinet members,  declared this as a policy priority and research was undertaken on this issue, I would gladly fund their fares to the next Rugby World Cup!  -- Croz

"We all lose when American workers are underpaid. It's a myth that small businesses can't pay a higher minimum wage, as proven already in the states that have raised theirs. When businesses don't pay a living wage all society pays. We pay through poverty and needless disease, disability and death from inadequate health care. We pay as women struggle to put food on the table. We pay as businesses and communities suffer economic decline."-Margot Dorfman, CEO, U.S. Women’s Chamber of Commerce

Fr Kevin J. Barr (4/10/15)

I was interested to read recently that the minimum wage in New Zealand is NZ$14.25.  However researchers are saying that the living wage in New Zealand is NZ$19.25.  Consequently some have formed a Living Wage Movement – a common platform made up of community groups, unions and faith-based groups to call on government and employers to bring about greater justice for workers and reduce inequality in New Zealand.

In Fiji we know that our present Government has introduced a National Minimum Wage of $2.32 an hour (following a move by the Employers Federation to have it reduced to only $2.00).  However a Living Wage for workers in Fiji is probably closer to $4.25 an hour based on the adjusted figure for the national poverty line (which measures the current cost of living).  Yet about 60% of workers in full-time employment in Fiji are earning below this.  The national minimum wage may be a start but it is totally inadequate in terms of justice.  This is particularly true when we remember that when purchasing goods and services with this wage, 15% goes back to government in VAT.

Some employers excuse the low wages they pay by saying that their workers are not “productive”.  But how can you expect a worker to be productive if they have to live in substandard housing, cannot feed themselves and their family decent nutritious food, cannot afford proper medical care and have the added educational costs for their children?

It is no wonder then that we have so many children in child labour (to help boost the family income), so many people in prison, so many family disputes and consequent domestic violence, and so many people who have sicknesses such as NCDs because they are unable to eat proper nutritious food.

Addressing growing inequality by paying a just living wages to all our workers would make a huge difference in the lives of so many of our families. And it would ultimately save government a lot of money in court cases, prison rehabilitation and medical costs.

Of course other issues would also need to be addressed for some people - such as inordinate amounts demanded by church soli and traditional ceremonies.  And people would need to be trained in economic literacy – how to keep a budget, set priorities and set aside savings for their future needs.  They would also need to be alerted to the dangers of falling for the glamorous advertisements of our consumer society which entices them to buy what they do not need.

1 comment:

  1. The piece of the pie allocated to workers is always small. In a country the size of Fiji Business can prosper, economy thrive but those that do the hard grind will be always the ones that suffer the most. Unless those in power look at life with some degree of honesty and truth the above article says it all and as such poverty is really the reality! As for profits its great as long as you not getting the smallest chunk of the pie!


All polite, reasoned, original comments welcomed. Please use your real name or a pseudonym by clicking on the down arrow next to Comment and then select Name/URL. You do not need to fill in URL. . Anonymous comments make discussion difficult..