National economic policies, based on the assumed paramount importance of growth (and not on sustainable growth and the fair distribution of its benefits) have resulted in the increase of economic inequality in most countries. The rich have become richer and the poor poorer. In this article, long time advocate for the poor Fr Kevin Barr writes about \wages and Government policies in Fiji-- Croz
By Fr. Kevin Barr
03 July 2015h
Much publicity was
given to the recent wage increases for our workers. But let us be very honest about the National
Minimum Wage and the other small wage increases published in the last few days.
Over a year ago Dr
Mahendra Reddy (after extensive research) proposed that the National Minimum
Wage should begin at the rate of $2.32 an hour and be regularly increased each
year. Mr Hazelman (representing the Fiji Commerce and Employers Federation)
announced publicly that the Federation had intervened with government to have
the National Minimum Wage reduced to $2.00 an hour. Our new Government is now restoring the
National Minimum Wage to its originally proposed rate of $2.32. In truth, if the employers had not
intervened, the National Minimum Wage for July this year should now be at least
$2.55 or more. But even that would not
be sufficient. As many have stated the National Minimum Wage of $2.32 is a joke
and totally inadequate in view of the current cost of living.
Yet, of course,
the National Minimum Wage will benefit to some extent those 10% of workers
(such as domestic workers, gardeners etc) who are not covered by the Unions
(about 30%) or the Wage Regulation Orders (about 60%).
In principle the
National Minimum Wage should be measured according to the Basic Needs Poverty
Line (or the current cost of living) which is probably at least around $4.20. The Bureau of Statistics can tell us the exact figure.
Again the
increases given to those workers in the ten industries covered by the Wage
Regulation Orders are minimal.
Representing the increases by giving percentages is an old trick and
very deceptive. It sounds impressive to
read that the wage of a particular industry has increased by 4 %. But,
if the previous wage was $2.50 an hour it means that in real terms the newly
increased wage will only be $2.60 an hour – a miserable increase of only ten
cents an hour.
I am open to
correction but I am told that there has been no significant increase in the Wage
Regulation Orders for at least two years.
We are told that:
“The increases in the Wages Regulation Orders is based on a formula Agreed to
by the Employment Relations Advisory Board and takes into account the Consumer
Price Index and other figures on how each industry is faring to calculate the
increases”. Yet Fiji should
be following not its own formula but the criteria for Wage fixing established
in accord with the ILO Convention to which Fiji is a signatory. Its principal criteria is the current cost of
living in the country (which is represented by the Basic Needs Poverty Line)
but it also takes into account other issues as well. If you begin with a low unjust
wage and increase it only by the current Consumer Price Index you will still
have a low unjust wage.
Unfortunately in
recent years “productivity” has been highlighted by some influential people as the major criteria for wages. But how can you expect workers to be more
productive unless their basic needs in terms of housing, nutritious food,
education and health care are being met for themselves and their families?
As the 1997
UNDP Fiji
Poverty Report stated clearly, low
wages is one of the major reasons for the high degree of poverty and hardship
in Fiji. We should be ashamed of ourselves for allowing
this situation to continue. We are
constantly being informed about the great increases in economic growth in the
country but the benefits of this economic growth are not shared. The old “trickle down” theory is now
recognised as a myth and the so-called “social responsibility” of many of our
employers (not all) revolves around sponsoring sporting events, fashion parades
or tourism extravaganzas – not a just living wage for their workers.
Our successive
Governments have agreed to implement the policies of the World Bank and the
International Monetary Fund which we are told will increase economic
growth. Yet at the Economic Forum held
in Davos earlier this year it was agreed that the policies of these International
Financial Institutions (IFIs) had produced a frightening increase in poverty
and inequality all around the world. When will we wake up? Yet we have actually invited the World Bank
to analyse the results of our most recent Housing Income and Expenditure Survey. How really credible and reliable will their
results be?
Government has
never acknowledged that the 20% devaluation of our currency in 2011 meant that
food costs increased by 36% and building costs by 29% (according to the Bureau
of Statistics). Then this was followed
by an increase in VAT by 2.5% which, because it is a regressive tax, affects
the poorer sector of our nation more than the rest. All this occurred while wages did not increase
significantly. Of course in all this we
followed the recommendations of the IFIs. It is about time we “stand up to the big boys”
as our honourable AG once suggested in another context.
Of course
Government has done well in reducing education costs, providing scholarships
and pensions and free health care and water for families on low incomes and
assisting housing for the poor. These
are laudable achievements and are most welcome but they are no substitute for a
just living wage. These are things which any caring government should be
providing for its people – particularly when two thirds of its population is
either in poverty or close to poverty.
Government has
bent over backwards to accommodate the demands of employers and investors and
has given generous wage increases to politicians and those in the upper levels
of the Civil Service. We are told that the country can now afford such
increases. Yet workers in full-time
employment are left with low, inadequate wages.
While employers and investors are given huge tax deductions and allowed
to influence the decisions of some politicians (in the style of “crony
capitalism”), worker’s unions are treated with scorn and their leaders insulted
and even mistreated.
Of course all this
is not entirely new. As Professor Wadan
Narsey wrote in his detailed report on the 30 year history of the Wages Councils, Just Wages in Fiji – Keeping Workers out of
Poverty (2006:76ff):
“It was clear that most employer’s
representatives resisted all proposals
for wage increases, and they were
quite successful in their attempts.
The long term outcome was the severe
deterioration in real wage rates
and a growth in poverty in the nation. ...
Employers would cite the usual
litany of industrial woes, warn of
redundancies and unemployment that
high wage adjustments would cause
and give a lower counter-proposal.
They would plead ‘inability to pay’
or ‘this is not the right time’ and get
their own way.”
He went on to
state that “stolen wages” (as he terms the refusal to pay an adequate just
wage) have seriously benefited employers but seriously disadvantaged thousands
of workers whose quality of life has deteriorated. He claimed that in the 30 years following Independence more than
one billion Fijian dollars has been transferred from worker’s wages to
employer’s profits because the business lobby was exceedingly influential in
getting its own way.
We know that there
are many good employers in the business sector who are deeply concerned for
their workers and pay wages above those required. However there are also many selfish and
greedy individuals who want to increase their profits by every cent possible.
It is about time
that we stop boasting about our levels of economic growth, the successes of our
tourist industry, the new opportunities for our garment industry and the need
for greater worker productivity and see that justice is done for our
workers.
Business may be the engine of
growth but it is our workers who keep the wheels of the engine turning. The pitiful wages paid to so many of our
workers is a disgrace to the nation. We
can promote business without being anti-worker and anti-Unions.
If we want to
bring religion into it (and, of course, all issues of economic social justice
involve moral principles) then we could quote James (5:1-6) where it says:
“Listen
to the wages you kept back. They are calling
out. Realise that the cries of the workers
have reached the ears of the Lord God.”
Or, perhaps even more compelling are
the words of Isaiah (59:12-17) which says that God is outraged not only by the
existence of injustice, but by the failure of anyone to do anything about it.
Let’s hope that we
will see some radical changes in the interest of social justice in Fiji today and
that our economy will become truly people-centred.
