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NATIONAL MINIMUM WAGE DEADLOCK: FLP leader Mahendra Chaudhry recommends $3.50 per hour be adopted as interim NMW to relief workers

8/6/2017

7 Comments

 
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Labour Leader Mahendra Chaudhry on the national minimum wage:

With Government and the Unions #deadlocked over the issue of a fair national minimum wage, Labour Leader Mahendra Chaudhry recommends that $3.50 per hour be adopted as an interim NMW to give immediate relief to workers while tripartite negotiations continue on a fixed rate indexed to inflation.

Here is the full paper by the FLP Leader:


#In a country where the average level of poverty is as high as 40%, with poverty in the informal sector estimated at an alarming high of 53%, the issue of what is a fair wage takes on enormous significance.

It is widely accepted that low wages is the root cause of poverty in Fiji among the working class families. It is estimated that some 60% of those in full time employment are earning wages below the Basic Needs Poverty Line (BNPL) currently set at $203 a week. These employees are all in the private sector.

Government’s own survey shows that those in the lower wage group are spending less than $40 a week on food for their families. This is absolutely shocking. What can a family of five buy for $40 a week except the bare essentials?

Is it little wonder that the Tebutt-Times poll shows cost of living as the number one issue of concern for our citizens?

A living wage pegged to the cost of living and one that meets the basic needs of our workers, must be a priority for any caring government.

Trade unions are currently locked in a dispute with the government and the employers on what is a living wage. The unions are asking for $4 an hour based on a BNPL of $186 which was set in 2014. The inflation adjusted BNPL is $203 which would mean $5.00 an hour.

Late last year, Economy Minister Aiyaz Sayed-Khaiyum announced that government was undertaking a review. It then appointed a consultant to prepare a report with recommendations for a revised minimum wage rate.

The unions were not consulted or invited to participate, and the entire review process was handled outside the Employment Relations Advisory Board.

The consultant Professor Partha Gangopadhyay from the University of the South Pacific recommended that the national minimum wage be revised from $2.32 to $2.68 per hour or $117.92 per week.

His view seems to be that workers in this category were helped by government handouts (social wages he calls it) and should be able to manage their household expenditure within the limit set.

Naturally, the unions rejected the report. A meeting of the Employment Relations Advisory Board (ERAB) was held on 1st June to discuss the recommendations. It is believed the Minister is now preparing a report on the matter for presentation to Cabinet.

This issue about government’s so-called “social wage” offsetting the need for a living wage for our workers, is totally unacceptable and has no relevance to the national minimum wage.

It is a reference to government handouts such as subsidised school bus fares, medicine, water and electricity etc.

We all know that these freebies are not working well. In fact, most wage earners are told that they do not qualify for these handouts. It is, therefore, not quite correct to suggest that it has brought down working poverty from 35% to 11%, as Employment Minister Jone Usumate stated a week ago (FT 29/5).

In any event, one must not be distracted by such red herrings. The bottom line is that 60% of our low income earners are receiving wages below the poverty line. And that most of them have difficulty spending $40 a week on food for their families.

Professor Gangopadhyay himself found this a very “disturbing picture”. He found that the lowest paid category of workers did not benefit from such government assistance because for them the major worry was the cost of food.

Using $240 a week as the median for food expenditure in Fiji, he found that 50% of families spent less than this with the lowest income group, spending only $40 or less on food because that it all they can afford from their poor pay packet. He considered even $100 a week for food as being in the lower category.

With a minimum wage of $2.68 per hour, a worker will receive $117.92 per week. If $100 a week for food is considered on the lower end, certainly on the proposed NMW, he cannot put decent, nutritious food on the table for his family while meeting all his other living costs such as rent, water, electricity payments and meeting other household expenses.

Every worker in this country has a right to a decent, living wage. A fair wage, for fair work.

The NMW of $2.68 an hour, therefore, is not the answer to our problem of tackling poverty. We need to raise the national minimum wage rate above starvation wages to a level where a worker is able to meet the basic needs of his family, and still be able to save a little.

What then is a living wage for our workers? This is the crux of the matter.

The best option for determining a fair NMW may be through properly convened tripartite negotiations between the unions, employers and the government. The issue is too important to be resolved unilaterally by government imposing its own figure on the unions and the workers. Nor should it become a subject of political propaganda in the lead up to the 2018 elections.

A negotiated NMW, as we have already said, should have a bearing on the basic poverty line – we can’t have our people surviving on cassava and tea or roti and water.

On the other hand, the NMW should not lead to job losses. It must also take into consideration the ability of the employers to pay - small business operators, in particular.

There may be exceptions but how these are accommodated within the NMW framework must be agreed to in the negotiations.

An #interim #solution to the impasse may be to raise NMW to $3.50 per hour ($154 per week) to give immediate relief to workers in this category. Tripartite negotiations can then follow to fix the actual rate which must be indexed to inflation.

7 Comments
Chiku
8/6/2017 08:42:29 am

When you look at the struggle for survival by the working poor in Fiji is it any wonder that people take off from the country the first chance they get?.
Just look at the que of people lining up at embassies to apply to get out of the country.
When you talk with some of these working poor from Fiji who managed to get out and start a new life abroad they tell you they didn't in their dream think one day they'd live the good life they have now.
Fiji is not a country based on social justice and egalitarianism . It is country based on entrenched structural inequality and the political leadership does not have the political will to disturbed the status quo largely because they are aligned to the big end of town - the mob who make big donations to the politicians in power/ the rulers to ensure they make policy decisions that go their way.

Reply
Chris
8/6/2017 06:07:43 pm

A living wage will become an election issue because the cost of living has ballooned out to beyond a manesgable level for ordinary families. Cronyism by the Fiji First Party to reward supermarket kings for their financial contributions to the party gives the licence for them to raise basic food prices beyond the roof.
Standards of foods sold in supermarkets have also fallen miserably so that Fiji consumers are basically eating junk. Little wonder then that our rate of NCDs is one of the highest in the world

Reply
LYLE
8/6/2017 09:19:50 pm

lol Cassava is more expensive get your facts right people now cant afford to buy cassava , and you can even plan cause no land

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Refugee
8/6/2017 11:13:33 pm

In this instant Chaudhary is in his element, probably, the best unionist Fiji has had so far. His is a solution, here, now on offer; any party to the negotiation would look foolish to accept.

And how on earth, we wonder, can Gango be a Professor?????? Hope he is not another Lankan!

Reply
Nazeem
9/6/2017 07:26:31 pm

Chaudhry the best unionist ever in Fiji phhhht. Puss off, Refugee. Your view fm Auckland is clearly blurred and u gotta stop listening to the biased view coming fm yr kitchen. This man Chaudhry only ever thinks of himself and what is good for him. He single-habdedly destroyed the Singapore inspired tripartite forum in Fiji using his power as Treasurer of the FTUC to extract greater concessions for white collar workers namely civil servants whom he represented as GenSec of the FPSA, hence creating bracket creep that left blue collar workers behind. They were represented by Chaudhry's rival James Raman. Ratu Mara withdrew it was the reason Ratu Mara withdrew Govt fm the Tripsrtite Forum thus removing trade unions forever from having a voice at the highest political level. Can u all him then the best unionist ever in Fiji? You need to rethink yr definition of excellence. As far as honesty goes the Hariyana letter and the associated scandal of Chaudry's non disclosure of funds collected in India for Fiji Indians suffering from the hands of the military and taukei thugs speaks volumes of Chaudry's character. You yrself have written of this so why the about face? Your problem is you are delusional

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Alibaba
9/6/2017 09:04:55 pm

Chiku i have read many of your comments on this blog and that of others like coup 4.5 etc. We seem to share the same ideals. I am a business person and have been struggling to run my business for many many years. The way i see it Fiji is a very very fixable country. You are right the political will must be there to give social justice.
Let me start by saying that we are a nation that imports everything. Aside from what is grown here like cassava dalo etc anything else that has a made in Fiji stamp is BS pure and simple. At best it is packed in Fiji. Therefor having a dollar that is so low in value is very very counterproductive. The only folks who win with a low dollar are the likes of FMF and the garment manufactures. Tourists quickly see how farcical the low dollar is when they start spending in Fiji as their money buys very little. The Fiji dollar should be about 65 to 70 percent of the US dollar. Second we must make a concerted effort to make sure that everything that we can grow in Fiji we grow in large enough volumes to replace imports and start exporting. For instance we import about 40 million worth of dhal every year. This is a no brainer as we can grow all of it. The Ministry of agriculture must be made the most important Ministry in Fiji as Agriculture is the back bone of any successful economy. Government must identify land lease it and hand decent parcels with the implements and training to eligible applicants who are serious about farming. Farming is no longer a spade and fork based endeavor. It requires capital and most folks in Fiji don't have the money thus the need for government help. Organizations such as the EU will help as long as we have genuine democracy. Just as we know that this FF government is a dictatorship in disguise so do they. They are only doing what is needed to help the people of Fiji and will surely open up full throttle if a proper democratic government is in power. Import duties must be brought down to about 15% across the board except on basics food and prescription drugs. This combined with the revalued dollar will reduce the price of goods on a our shelves and provide immediate relief to our people. Even if we only increase the Minimum wage to say $3.50 an hour for the first year the lower cost of living will help straight away. We need to re look at our tax policy and and move income tax back to 28% while removing all the other BS taxes that this government has introduced in hidden form. As i said Fiji can be a beaken of hope and prosperity in the South Pacific and it is possible. To do that we must get the right people into power. I don't know about you but i cant wait to stand in line and vote to get rid of this government. I know 1000's who are just biding there time as well
Go NFP.

Reply
Sadhubaba
12/6/2017 05:54:30 am

Important piece left out...employer will pay current minimum and chaudary will top it up to $3.50 from.his haryana donation

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