A Fair Minimum Wage for Fiji: Why Government Should Heed Wadan Narsey

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 It's an understatement that he's not very popular with Government for his outspoken comments on a numbor of issues, but former USP Economics  professor Wadan Narsey is a voice to listen to on most issues involving economics.  His article in The Fiji Times "Minimum wage rate in Fiji" (15/6/19) is a case in point.

Following a detailed discussion on the criteria to determine a minimum wage, he rightly (I think) criticises government for employing an overseas economist to advise them, when a number of qualified local economists —far more aware of what it costs to live in Fiji—are employed at the country's three universities. He then goes on to discuss the 2007 reforms of the wages councils, for which he commends government (and Fr Kevin Barr).

His main message? The absolute need for a tripartate council of employers, unions and government to determine wage and minimum wage levels, once followed by government,  rather than the current practice of sporadic reviews. 

"Most importantly, the taxpayers must ask why the Bainimarama Government refuses to use its own historically proven wages council mechanisms for a rational, sustainable and ongoing institutional solution which answers virtually all the questions raised...?"   (see below).

See note at end **

The current hourly minimum wage for a  48-hour week is $2.12 a week.

Wadan says the question of what constitutes a minimum wage  poses "some horrendously difficult questions". Who exactly should decide? How will they be determined? To which group of workers should they apply? How often should they be changed? How will they be enforced? What if an employer claims inability to pay? 

These are the questions he thinks would be answered by a return to the wages councils.

The overseas adviser  was Dr Partha Gangopadhyay from the University of West Sydney who concluded the lowest paid workers are not affected by food prices because their "consumer basket" does not include all items, and many items are price controlled. On this basis, he arbitrarily recommended paying only 50% of the cost of living increase, or 2.6%.  

Columnist Allen Lockington invited him to stay with him for 6 months to see what food costs!

Employer representative Kelly Hart, whose company already pays $3.70 an hour, and who may not have been  aware of the  earlier wages councils, thinks "Government is holding things back ... her board is (delaying $4) because "Government says we do not have to'". 

She says "they need to talk to the unions ... to be locked in a room until they reach an agreement that is sustainable for business and effective for workers."

Waden is a realist. He says  recommended wage increases need to be applied industry by industry because different industries have different capacities to pay. "High minimum wages cannot apply to the thousands of small informal sector employers."

He thinks some employers are happy with the sporadic wages reviews and the employment of overseas advisors because with this practice the wages they will pay will always fall behind the rising cost of living.

Others, such as, I expect, Kelly Hart, would be happy to see a return to the wages councils structures established in the early days of the Bainimarama government. 

In those days, Government made great efforts to involve people in decisions and was altogether more inclusive than it has become today as it clings to power with barely 50% of the vote at the last election.  

My bet is that heeding Wadan on this issue would win it much needed votes.

-- ACW

** Note. These are salaries. For comparison, the present minimum wage for a 48-hour week would give $407 a month, barely one-half of the average minimum salary. pn418 

Related
https://fijisun.com.fj/2019/05/30/2-90-an-hour-to-beat-inflation-professor/