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

pn418

 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.

Saluting Fr Kevin Barr

 

pn417

A large number of people read my earlier posting containing  Fr Barr's letter which refuted  allegations over the Lagilagi settlement.  

I take this as an indication of the special place he has in many people's thoughts and hearts.

Here is one (slightly edited) comment that I thought deserved greater prominence.

-- ACW


SERVICE OF INCOMPETENCE Minister Parveen Bala

I salute Fr Kevin Barr for his tremendous achievements in working in informal settlements Fiji. 

A Good Friday Reflection

This is essentially a political blog on Fiji. Readers seeing this Good Friday article may suspect a change in direction.  If they read on,  they will see just how relevant Fr Kevin Barr's religious reflections are to Fiji's political situation.

 

 A Good Friday Reflection 

Kevin J. Barr 

Too many Christians today have spiritualised the death of Jesus and are satisfied to say simply that Jesus died for our salvation – “the blood of the Lamb has washed away our sins”. While this may be true theologically, these Christians tend to ignore the stark reality of the gospel story and the real historical context in which Jesus lived, preached and died. Moreover this approach can keep us trapped in a devotional Christianity often unrelated to the world in which Jesus lived and in which he preached his message of the Kingdom.

Poverty Alleviation and Poverty Statistics

By Kevin J. Barr

The Poverty Alleviation Unit estimates that in recent years $1.5bn has been spent on poverty alleviation programmes yet poverty does not seem to decrease. Rather it seems to be on the increase. Why is that?

My opinion is that while government is spending money on poverty alleviation programmes for urban and rural areas:

1. It is not sufficient for the needs;
2. Many of the policies government follows negate the effects of the poverty alleviation programmes.

Gujarati: Wealth and Poverty

Thoughts from a Reader

During the days of girmit, Gujarati from northwest India came to Fiji as free settlers as  they were British subjects. They came as small traders and craftsmen dealing in jewellery, clothing, shoes and laundry work and many, to set themselves up, borrowed from kin in Gujerat and other Gujerati already in Fiji. Imported articles from India, costing a rupee were sold for a dollar in Fiji, making twenty-fold profits. Within two generations, some once “poor” Gujarati became multi-millionaires. Most other Indo-Fijians arrived in Fiji as indentured or contract labourers (girmiti) and while some of their descendants have done well, many are among the ranks of the poorest people in Fiji.

Just Wages? 'Just' Flies Away

by Crosbie Walsh

Government sets up the Wages Councils, accepts its method of determining a just minimum wage based on the Poverty Line, accepts its recommendations for wage increases for some industries, announces when the increases will be paid, and then backtracks on everything because there's a global crisis, some employers say they can't afford to pay — and they need to remain competitive with Bangladesh!

Employers did not direct these concerns at the Wages Council and earlier some employers had refused to co-operate with the Council to determine what they could afford. They bypassed the Council and went directly to Government, and Government did not refer them back to the Wages Council. Instead, it heeded the employers' concerns and ignored the Wages Council.

Drugs, Fuel, Comparisons with NZ, Teachers, Wages

Check out the new Quote for the Week in the right sidebar and 

scroll down to Friday's postings and Weekend Reading.

NOO33. ESSENTIAL DRUG PRICES DOWN 30%. Prices of 74 basic essential pharmaceutical products that are under price control will be reduced by an average of 30% from next Friday but "lifestyle" drugs, on which pharmacists will be able to make high profits, will not be affected. Pharmacies will be required to display the basic drugs under price control.

In making this announcement Commerce Commission chairman Dr Mahendra Reddy said “Government has been concerned for some time with regard to the high and increasing prices of pharmaceutical products, in particular, essential drugs, and  their variability within a small geographical location.” he said.

Dr Reddy said there were several implications from these two issues: First, low income households could be deprived of accessing essential drugs; secondly, an unhealthy population creates additional costs to Government’s health system, and  thirdly that  lack of full information on drug prices implies those seeking drugs may end up buying drugs from pharmacies whose prices are much higher relative to those whose prices are low.

N0034. BUT FUEL PRICES ROCKET. Today the price per litre of motor spirit will increase by 16 cents to F$2.37, diesel by 12 cents to $2.07, Premix outboard fuel price by 20 cents to $2.33. and kerosene by 11 cents to $1.68. This will obviously impact heavily on the transport industry where govenment controls prices.

The Fiji Bus Operators Association said they are ready to absorb the increase as no further submissions will be made to the government to cushion the effects of the increase.

However, Fiji Taxi Union general secretary, Rishi Ram said he will write to the Transport Minister and LTA Board requesting them to consider the earlier submission for the survival of taxi industry.

Fiji has no control over the price it pays for imported fuel which has recently increased in price due the Northern hemisphere winter where fuel is also used for heating and power generation. This is a major reason why government is pushing micro-hydro and other local fuel saving projects.--  Based on 2011, No:0083/AG

N0035. NZ FUEL COSTS EVEN HIGHER. Fiji is now paying F$2.37 a litre for standard petrol, but New Zealand motorists are paying NZ$1.975 or  F$2.785,  41 cents a litre more than Fiji.  If only we'd had a coup, I could blame it on John Key.

N0036. NO JOY FOR NZ. Unlike Fiji's anti-govt bloggers who rejoyce at every economic setback for their homeland, I take no comfort from the fact that the NZ economy is barely growing and may have actually shrunk late last year. This fact is recorded to show that many of Fiji's economic problems have nothing to do with the 2006 Coup.

N0037. MORE TEACHERS RECRUITED. the Ministry of Education reports it will recruit 200 to 240 new teachers this year to replace the 167 who retired last year, those who have changed occupations, who are on in-service training and others who left for overseas. Deputy Secretary Josefa Sania said the "teachers will be replaced by graduates from Fiji's tertiary institutions ...  We have enough graduates from these institutions."

Fiji has approximately 5,000 primary and 3,000 secondary teachers. The overall pupil-teacher ratio has decreased slightly to about 20, but like most averages the ratio is misleading.  Rural school ratios are sometimes as low as 1:10 but in urban schools, most particularly in Suva and Lautoka, the ratio is between 1:45 and 1:50. -- Based partly on 2011, No:0056/MOI.

N0038. BARR KEEPING FINGERS CROSSED. Chairman of the Wages council, Fr Kevin Barr, is keeping his fingers crossed that the PM's Office would consider its recommendation and move forward the implementation date for the new Wages order which is expected to come into force from May this year. He said more detailed information is needed on the workforce to ensure appropriate levels of wages are paid for the various sectors.The lack of information on numbers employed in each sector and the work they perform is a challenge in setting out fair levels of wages and salary.

It is understood that government wants three economics professors to determine minimum wages but the Wages Council prefers a formula, used by many other countries, based on the cost of living. Employers prefer one based on inflation and productivity. The Wages Council would also prefer determination to be made by a group more representative of the social sciences.

VAT has Increased to 15%

Kevin J. Barr

This  short article, and an earlier one by Fr Barr on his assessment of the 2011 Budget on the poor, was submitted to two Fiji newspapers. Both chose not to published them.  Whether this was due to direct or self-censorship is beside the point. There is a need for public discussion on such issues.

NZ Aid's New Direction, Neo-Liberalism, and Poverty as a Structural Problem

Fr Kevin Barr's "rushed comments" on last weekend's article by Gerald McGhie on NZ Aid. Fr Barr is the Chairman of the Wages Councils.  You should read McGhie's article if you have not already done so.

A Blow to Productivity and Stability

By Fr Kevin J. Barr 

Chairman, Wages Council but expressing his personal views

1.   Productivity

In a previous article published in the Fiji Sun a few weeks ago I discussed the issue of productivity and showed that it involved a number of inter-related components – not just worker productivity. Worker productivity is only one element in the wider issue of the productivity of a company or business.

How the Poor Fared in the 2011 Budge

Kevin J. Barr

The poor and the disadvantaged were not forgotten in the 2011 Budget announced on Friday. But the allocations made for them were totally inadequate to their numbers and totally inadequate to any commitment to overcoming poverty as expressed in the People’s Charter and the Millennium Goals. Basically the Budget (entitled “Enhancing Economic Growth and Inclusive Development“) addressed the needs of investors and the business sector – especially the tourist industry – to enhance economic growth. The influence of the IMF and the Asia Development Bank was apparent and little evidence was given of “thinking outside the box” of their recommended policies and prescriptions. More on this later.

Fr Kevin Barr on the Wage Councils

ADDRESS of CHAIRMAN OF THE WAGES COUNCILS

Fr Kevin Barr

JJs on the Park 16^th September 2010

Rumours, PER, Commonwealth Games, Chinese & Thai Help, Afforable Housing, Wages

WANT TO COMMENT ON THIS POSTING? THEN PLEASE TYPE A NAME, PSEUDO OR REAL, AT 'NAME/URL.' I'M SORRY BUT ANONYMOUS COMMENTS WILL NOT BE PUBLISHED.

Commentators on NZ Sanctions and Wesleyans please resend, using a name.

See new QUOTE FOR THE WEEK in right sidebar.  Also new link to Fijianatimes.  

DON'T LISTEN TO RUMOURS. "  Don't listen to rumours. They are dangerous."   This was the slogan heard on Singapore radio and TV in the early 1960s when this small country was not yet free of racial tensions, civic unrest, and unfriendly neighbours --  a country then not too different from Fiji now.


In a weekend posting ABC journalist Bruce Hill wrote a humourous but telling article on his recent visit to Fiji where rumour abounds. He was correct in inferring that PER (The Public Emergency Regulations) leaves the field wide open for rumour.

But what he did not say, which is equally true, is that some rumour is deliberately manufactured to create political instability, just as it was in Singapore. I would advocate lifting PER to lessen the influence of such rumours, and leave other public order laws to deal with the "manufacturers."

FOR AND AGAINST THE PER. The weekend post generated much comment. Some readers agreed with Hill. Others thought rumour was  nothing new in  Fiji. I argued that PER should be lifted despite the risks because it would show good faith and win government much needed support from the uncommitted. I thought other laws would contain crime -- and attempts to destabilise government.  Still other readers wanted the PER retained. Here is what one of them wrote:

"Will Bruce Hill take responsibility should the PER be lifted for those who decide overnight to invade my compound or my neighbours' next door - eight-at-a-time wielding knives and masked by balaclavas wholly intent upon havoc? Does he or anyone like him fully realise the reality of the situation that is being confronted? Rumours distort the climate of prevailing uncertainty but a premature lifting of the PER would most likely be a return to opportunistic crime and rent-a-mob.

"So easy to advocate for the easy way out when you are not here and not prey to 'what happens next'. Not unlike democratic elections now underway in Afghanistan. More than premature, one might think? Who has the right to exhort people to vote if doing so will expose them to marauding Taliban? Afghanistan is a war zone, for heaven's sake. Fiji is a 'rumour-mongering zone'.

"The smart people work out a way to disentangle fact from fiction. The rest just sail along with the tide of the latest fantastic fallacy robed in the garb of veracity. How else is one to pass the time until 2014? "

OUT BUT IN THE COMMONWEALTH GAMES. Isoa Damudamu will be part of the English Rugby Sevens team in Delhi next month; other Fijians are likely to be members of other competing teams and -- with the exclusion of the Fiji team--  medals for England, Australia, Samoa and New Zealand seem more assured. It is likely a Fijian (or two) will help them to victory.

CHINESE TO HELP DEVELOP VANUA LEVU. A Chinese government Chinese government initiative, sparked in part by the PM's recent visit to China, resulted in a visit by a team from the Chinese Embassy to Fiji's second largest island Vanua Levu (5½ thousand square kilometers, and half the size of Viti Levu) last week. The visit is expected to result in more Chinese investment in the island. Speaking of the visit, the PM said: "We need infrastructure. We need water. We need electricity. Australia and New Zealand and  America, none of those nations are going to provide that. We know that now because of their policies towards us, so let's forget about these nations." [It need not be an either/or choice, if only the PM  played his cards  closer to his chest.]

THAILAND HELPS AFFORDABLE HOUSING. Fiji and Thailand  are to sign a memorandum of agreement on housing assistance. The new initiatives will involve NGOs,including the People's Community Network (PCN) and new homes at Lagilagi ('squatter') settlement in the Jittu Estate, Suva. [The original article has been corrected.]

MINIMAL OR MINIMUM WAGES? Wages Council chairman Fr Kevin Barr, reacting to concerns by some business leaders who queried the link between wages and poverty, thinking unemployment a more likely cause, said that while there are other factors that contribute to poverty, the level of wages is the key factor. Many full-time workers, he said,  are poor because their wages are below the poverty line, and close to 40% of Fiji's population live below this line. Over a half of full time workers can't afford to send their children to school, they can't afford proper health care and good nutritious food.

He said a fair wage was not whatever wage the worker was persuaded to accept. A just wage was one that  a worker to enable him or her to support the family in their basic requirements of food, clothing, housing, education and health care.

Scurrilous* Misreporting by Anti-Government Blog -- Crosbie Walsh

Fr Barr on Allen's Poverty Article

Squatters and the Poor

Fr Kevin Barr The articles of Allen Lockington have become a regular feature in the Fiji Sun.  They are often interesting and have some worthwhile and helpful observations to make.  However his recent article on poverty and a previous one on squatters caused me some concern because they were rather superficial and glib and trotted out the usual prejudices which so many people have come to accept.  The articles showed little understanding and sympathy for so many people in our country who are poor and struggling and face real hardships. For some reason it seems that people like to fix their attention on some of the exceptions and make them out to be the norm. I was going to ignore Alan's articles but, on second thoughts, I decided they should not pass without comment.  Many people read Alan's column and could easily have their old prejudices reinforced by the comments of a popular columnist. I guess one of the main faults I found was that of blaming the poor for their poverty and failing to acknowledge that poverty is a structural problem - not an individual failure.  Most of the poor in Fiji are victims in a society structured for the benefit of some at the expense of the many.

(B) Twenty-Three Years On From 10:00 A.M., May 14, 1987

Three items: 

Subhash Appana (immediately below); Citizens' Consitutional Forum Anniversary Release (abridged), and my comments on the CCF release.

Coup Anniversary and Forgiveness
By Subhash Appana

Today marks the 23rd anniversary of Rabuka’s coup, a coup that brought into the tranquil backwaters of the South Pacific the use of might over right as a weapon to change government. Sure, this had been the mode of choice in the good old days, but colonization and refinement by the British was supposed to have changed this more than a century ago. And like all old habits, it was supposed to have receded into the mists of time.

(+) A Close Examination of Some Anti-Government Blog Postings

Sometimes it is necessary to expose the unreasoned bias, viciousness, inaccuracies and deliberate misrepresentations published in the anti-government blogs, most of which not not allow comments on their blogs from anyone critical of their postings, and whose answers to their detractors attack the critic and not the argument. Thus, to many of these bloggers, I am a "coup apologist" who writes  "bullshit."

Today I look at three examples (and the dissemination of one by RadioNZ International). Tomorrow, or the next day, I'll examine their mischevious postings on former Judge Nazhaat Shameem, the publisher of the Fiji Times, and the Crimes Decree.

Fiji Democracy Now
Fiji Democracy Now has a feature "Father Barr makes more empty promises to the poor" in which it makes several claims:

Claim One. "Fiji’s most disgraceful hypocrite, Father Kevin Barr, has promised he’ll soon award wage increases to the low paid workers of Fiji." 

Fact. Fr Barr has promised nothing on what he will do. He speaks as the chairperson of the Wages Council. For those who do not know of Fr Barr, he has championed -- and sought to empower -- Fiji's underprivileged for over two decades, and for this work he is widely respected in Fiji and overseas.

Claim Two. "Poverty has exploded under the illegal regime which he supports, so his conscience must be pricking him." 

Fact. Poverty has increased, but poverty is not of this government's making. In the 1990s some 25 percent of Fiji's population were below the "poverty line." Today's situation is exacerbated by the the world recession and the isolationist policies of Fiji's neighbours. Its economic options are limited but it has sought to assist the poor in several ways, including the  removal of VAT on basic food items, and not increasing VAT as the Qarase government intended to do. The infrastructual actions in Government's Roadmap should help reduce rural poverty, and measures taken should see a sharp reduction in overall poverty in the middle- to long-term.

Claim Three. "What this foolish priest doesn’t seem to understand is that a wage increase across the board which he’s promising will simply lead to more devaluation which will further push up the price of imported food." 

Fact. The wage increases are not "across the board." They are industry-specific and concern minimum wages only. They are also being  introduced progressively to assist employers. The ultimate aim is to increase the minimum wage to the "poverty line" that currently stands at $175 a week. Some 60 percent of workers now earn less than this.

The wage increases could lead to inflation (not devaluation!) but the poor spend all their money in the local economy which should prove a stimulus in some areas. Meanwhile, government's Roadmap includes measures to increase local food production and reduce dependence on imported food.

Does FDN think there should be no minimum wage and no wage increases, even when 60 percent of Fiji's population is living below the poverty line?

Claim Four. "This self-appointed expert of electoral systems knows nothing about economics." 

Fact. Fr Barr has never made any claim to expertise on electoral systems -- but he does have a Masters degree in Economics!

FijiCoup2006
Sai Lealea's blog FijiCoup2006 reports that a "drunk military goon squad" arrested a number of people, including two former MPs, who were drinking grog (yaqona/kava) at the SDL Party office last Friday night. They were allegedly taken to QEB, insulted, demeaned and eventually released.

The incident, censored by media watchdogs, although not particularly important in itself, does no credit to the RFMF, the Military Council or Government, who need to show that the RFMF is a "disciplined force" not a capricious rabble.

But why do the blogs only publish negative news?  In "Write your letters to the Editor here" I have invited Sai to respond properly to another reader who did not agree with his comments, and to reply to my invitation to show a "way forward."

Fiji News Uncensored
Another anti-government blog, FijiNewsUncensored, citing "very reliable source within the Fiji's Prime Ministers office,"  claims that Bainimarama was so fazed that the army intelligence did not pick up the planning of the "600,000 petition" (mostly organized from overseas) that he is "overcome by fear knowing that his end is near... The madman is breaking loose once more. We will continue to keep you up to date as our people on the ground are completely on red alert. Fiji is in a very dangerous situation right now."

The reality, as explained in earlier postings, is that this totally unreliable petition was a fiction of the political parties deposed by the 2006 Coup and was certainly not signed by a fraction of the 680,000 claimed. Bainimarama saw it for what it was immediately. As for the "red alert," I suspect this is the latest in a sequence of  threats, none of which eventuated, intended to destabilise government and keep its opponents happy. 

RadioNZ International

I see from FijiDemocracyNow that  RadioNZ International is still giving credit to the petition by citing its organizer.  No mention is made of this blog that exposed the petition (see link above)  for what it was. In the interests of informed and unbiased journalism RadioNZI should always cite sources. This it seldom does, leaving this writer to believe it is often "fed" news items by anti-government people and organizations. If it carries on  like this, there'll soon be a case to take to the NZ Broadcasting Standards Authority.

P.S. I should have added two other blogs, one that inferred Bainimarama's visit to Ra province was somehow connected with the increase of typhoid; the other claiming that the Muslims had taken over government.  What caused the Muslim accusation? President Epeli speaking on the Prophet's birthday. Earlier, it was the Catholics and the Hindus.

Cartoon: Pacific Media Centre/Cafe Pacific

Short Briefs Mon 1.3.10

Today, Muslims celebrate the Prophet's Birthday and Hindus Holi. President Ratu Epeli Nailalatikau stresses the importance of religion in nation building and taking Fiji to a better future.

I find it strange that the RadioFiji web page invariably chooses a photo of PM Bainimarama in military uniform, just like the overseas media that seeks to stress his military role. Bainimaramana  said the lifting of sanctions was the main issue discussed between Ratu Inoke Kubuabola and Murray McCully when they met last week, but "Ratu Inoke was doing the talking on Fiji’s behalf." Good. One spokesman. One voice.

PM Bainimarama has again stated the SDL, NFP, FLP parties will not participate in the forthcoming National Dialogue or be allowed to return to power in 2014. He claims ther parties are holding secret meetings and were behind the "600,000" petition.

Wages Council chair Fr Kevin Barr  expects wage increases from July 1 2010, saying the Council is trying to be fair to employers and workers. The People's Charter sought a national minimum wage in accordance with the poverty line, at present $175 a week. Some 60 percent of workers are below that. The increases will be introduced gradually.

The new $8m bridge at Naqali  opened by the PM last week will enable the eleven tikina (districts) of Naitasiri who live past Naqali to get their produce to the markets in time and also transport those who are sick to the hospital and the struggle they used to face in the old bridge will now be a thing of the past. The villages will also soon have access to electricity.

Government is exploring ways to upgrade Nadi International Airport.

The new US Embassy at Tamavua, Suva, to open next year will have cost $100 million, about one-half of which feed back into the local economy. The US Embassy is accredited to Fiji, Tonga,  Kiribati, Tuvalu and Nauru, and is the largest US consul district in the world which includes French Polynesia, New Caledonia and Wallis and Futuna.

(o+) How the Poor Fared in the 2010 Budget

In this important paper,  Fr Kevin Barr (photo, left)  of ECREA, the Ecumenical Reseach, Education and Advocacy NGO, says he knows Government is genuinely concerned about the poor and intent on putting measures in place to greatly reduce poverty, but he is not convinced the 2010 Budget is a pro-poor budget. 

I am surprised the paper was not published by the mainstream Fiji media and wonder whether this was due to censorship.  If so, the censors should think again.  This is precisely the sort of helpful commentary Government should welcome.

An ambitious ten point economic plan announced in the 2010 Budget included the statement: “Poverty to be reduced from current levels to less than 5 %”. This certainly is ambitious. 
 

A number of times throughout the Budget we were told that there would be “targeted assistance to the poor”. But it is not always explained how this will be done.

We are told that:

• Those already on the FAS will receive an extra $30 in food stamps;
• The free bus fare scheme for school children will be continued subject to a means test;
• Housing assistance worth $10m will be available for first home owners in the form of a $10,000 deposit on a home.
  
  

1. $9m extra was provided to poverty alleviation for $30 extra a month for those on Family Assistance and for more staff to administer the poverty alleviation unit and collect more reliable data. Questions were raised about the misdirection of funds by the Social Welfare Department in the past and the lack of reliable data as though this was the reason for the growth of poverty in the country. As the Fiji Sun reported: “Government has tried its best to reach out to the poor ... However they remain poor because something is amiss. It has now been established that the funds allocated for them have not resulted in actually getting them out of the poverty cycle.”

I have been involved in three reviews of the FAS. It is totally inadequate, its criteria sometimes too narrow. There are not enough staff (which will thankfully now be remedied) and there are not enough vehicles for staff to monitor those on the scheme. Except in some cases it is not possible to get such categories of people out of poverty – only to help them live with a bit more dignity.

Those on Family Assistance (about 27,000 people) are only the tip of the iceberg of poverty. We know that currently there are at least 40% of our population living below the poverty line and probably about another 25% living close to the poverty line. Moreover 60% of those in full time employment are earning wages below the poverty line. So it is not just a matter of a “few people out there” who are poor and whose data need to be checked to verify that they are poor. In addressing poverty, government may well start with those on FAS but they represent only the tip of the iceberg of poverty in the country. In fact those on FAS represent only 7.9% of all those in poverty (and 3.16% of the total population).

Every government for years has been talking about getting more reliable data. By all means get more data but we already have enough data to tell us that we have a huge problem of poverty in Fiji and we are not sufficiently addressing it.

(o) Minimum Wage Increases: Feedback and Comment

The minimum wage increases, though long overdue, have come at a bad time for a Fiji garment industry that in December 2008 employed an estimated 10,000 workers. Had employers voluntarily increased minimum wages a few years back when their profits soared, Wednesday's increase would have been less than 20%.

Since December there has been a 20% decline in orders, and several factories have reduced their labour force or cut working hours. While further layoffs may not be caused by Wednesday's wage increases, the increases certainly will not help. It's become a damned if you do or damned if you don't situation for employers. Retain today's workforce, with some workers paid more than before (but with many still paid below the poverty line), or cut the workforce leaving those made redundant with no wage income at all. One hopes garment employers (whose relations with their worker has been uneven, to say the least) will do all they can to be fair to their workers, while keeping their factories, if truly sustainable, afloat.

I have received two comments by email on the minimum wage posting. (It's easier for me if comments are added by clicking "comment" at the bottom of posts.)

The first was from 'Bhaiya':

"I hope that Bainimarama doesn’t buckle to employers’ insider lobbying yet again! Fr. Barr has done a lot of work on this and a number of ‘progressive employers’ have accepted that wages in Fiji need to be increased. The background on the [garment] industry is important. Many fly-by-night operators set up factories, made their money and took off, sometimes not paying the workers their wages! There were several cases of workers turning up to work to find the factory gates closed."[My encyclopaedic atlas, see picture side bar, has a section on most industries, including garments and clothing.]

The second comment sent via Wages Council Chairperson Fr Barr was from Mark Halabe of Mark One Apparel Ltd. markoneapparel@hotmail.com

Mark Halabe's Feedback (1-7) and My Replies (in red)
Thank you for the email and the attached article. Please allow me to make some brief comments:

1. Wages Council may have not have been active, but unions have, wages were increased over the last 3 years so it's not true that all workers had no wage increases.
Croz: Did all or any minimum wage garment workers receive increases? The increase (20%) is high compared with most other industries. This is presumably because "high" is needed to compensate for exceptionally "low."

2. There is a 15% withholding tax when repatriating profits, (as for all export income industries).
Croz: Now, but not when the TFF and TFZ's were introduced or for some years afterwards. There are, of course, many ways to send money overseas untaxed, some of them legal. Local dividends were capped at 15%, half of the "normal" rate.

3. Government provided or heavily subsidized infrastructure, is not true! (for the garment industry????)
Croz: Was there really no infrastructure at the Valelevu TFZ when Mark One Apparel moved in? Or no tax concessions against infrastructural costs?

4. Cost of manufacture is still a critical factor when marketing Fiji as a competitor to Asia, even as we fulfill Walsh's wish list!
Croz: Fiji's garment industry, as presently structured, can only compete against Asia in "short runs" and quick delivery to Australian and NZ markets. The "wish list" is mainly Australia/SPARTECA's, not mine. See link on post. Economist Prof. Ron Duncan was made similar comments. He said "Despite a 17.5% price advantage over imports, the industry is still shrinking." See Fiji Times. I recall you agreed with some of his argument. Also see Storey reference* below.

5. Over the last 20 years less than 1% of gross income equated to profit, not a great investment, nor a great incentive to keep investing in Fiji.
Croz: Clearly unprofitable. But this is not due to high wages or unsympathetic governments. The industry has not adapted sufficiently to changing circumstances in terms of upskilling, plant, products, and markets. Again, these are not my thoughts but those of experts.

6. Since we last met all of my predictions have unfortunately come true, we are now down to less than 300 staff from (700 in 2007).
7. This year has been the worst in 20 years for Mark One and the industry, with little or no signs of improvement.
We reap what we sew (pun intended). This wage increase will only bring less and will not stimulate the economy as you [Fr Barr] have predicted. Time will tell and I hope for the sake of the Fiji economy that I am wrong."
Croz: I sympathize, I truly do because your reputation is as an honest and fair employer (certainly compared with many others as 'Bhaiya' observed, above), but as noted in the post, it is the nature of capitalism that non-competitive businesses collapse. If low wages only produced 1% gross income equating to profit, far more than low wages are needed to make the industry profitable.

Finally, Some Arithmetic
You were reported in the Fiji Times (10 Dec.) as saying the 20% increase would mean an extra cost of $300,000 a year to Mark One Apparel. I have some difficulty with this figure. There will, of course, be a "carry through effect" to some workers who are paid above the minimum wage, but if we take the $1.48 to $1.78 minimum wage increase as typical , we have an increase of 30 cents an hour (and those on $1.25 will receive only 25 cents), or $13.20 for a 44-hour week, and $673.20 for a 51-week year.

This multiplied by your 300 (and falling) staff results in $201,960, nearly $100,000 less than your figure. Excuse the pun, but that's a lot of bula shirts!

* For a very readable history of the garment industry's ups, downs and futures, read Dr Donovan Storey. Click here.