$4 an hour could hurt us, says consultant

Professor of Economics and minimum wage Consultant Dr Partha Gangopadhyay while holding a public consultation for members of the community in Nadi. Picture: SUPPLIED

BY pushing for a $4 an hour minimum wage and not engaging in consultations on the national minimum wage, trade unions could be hurting the very people they claim to represent.

This was the view expressed by an Australian consultant engaged by Government to help determine a new national minimum wage for the country.

Dr Partha Gangopadhyay, a professor of economics at the Western Sydney University, said it was important that trade unions and the public understood how the poverty line figure was determined.

“The poverty line figure is based on 2008 prices and I have adjusted that, and after adjusting it I have found out how much money is needed to purchase basic food items and survive,” he said. “The actual figure is $2.88 an hour and we are just above the poverty line, we are not drowning at the moment.

“I fully understand the difficulties in any kind of bargaining but at the same time, it adversely impacts on the very people they are trying to protect.

“The problem here is if we move to $3.50 an hour, profits will be squeezed and they will be squeezed so much that businesses won’t be able to compete and they will either shed jobs or leave the market and that does not help anyone.

“So the minimum wage is a blunt tool and we have to be extremely careful because it can hurt us very badly.

“The very people we are trying to protect might lose their jobs.

“I had a survey this year where I found out how their job security changed over time as we increased wages, how their wage or income uncertainty changed over time. I did not see any evidence of that.

“If we are careful in how we increase wages, job insecurity will not rise and income insecurity will not rise.

“I am very confident that $3 or $3.10 is a good benchmark.”

About 20 people attended the consultation at the Sugar Cane Growers Council hall in Lautoka.

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