Living on a just wage
29 November, 2017, 12:00 am
This is a continuation from yesterday’s article by Father Kevin Barr where he touches upon some reasons, in his view, wages are low in Fiji.
In recent budgets, employers and investors have been given huge reductions in corporate tax and in personal income tax. The ordinary people and the workers of the country got very little. Moreover workers’ unions have been poorly treated. This anti-worker stance is deplorable and has been criticised internationally.
All this needs also to be seen against the background of the devaluation of the Fiji dollar by 20 per cent in April 2010. The devaluation of the Fiji dollar by 20 per cent meant the purchasing power of the Fiji dollar declined considerably. This had serious repercussions for the 60 per cent of those in full-time employment whose wages were already below the poverty line.
The Fiji Bureau of Statistics calculated that the Consumer Price Index (CPI) for food increased by 38 per cent and for building materials by 29 per cent. While the cost of living increased, wages did not.
In an atmosphere of restrictions, workers and others are not free to protest against the way they are being treated. Too much fear has been created among the people.
Workers’ stand and their unions is a positive step to protest against injustice and make a stand for justice. People want those greedy and selfish employers to examine their conscience and act with decency and human concern for the rights and needs of their workers.
They also want government to break its attachment to the employers’ lobby and protect the interests of Fijian workers — to put the people first.
On October 1, UNESCAP launched its Economic and Social Survey of Asia and the Pacific 2014. It contained some good news but also some bad news for Fiji. On the one hand it acknowledged Fiji’s economic growth was earmarked at 5.8 per cent. This was a remarkable achievement.
However, on the other hand, 35 per cent of Fiji’s population lived below the poverty line and another 30 per cent lived just above the poverty line. Moreover another 23 per cent of Fiji’s youth population remained unemployed.
Thus as observers noted, average economic growth figure masked the deeper social problems the country faces.
There may be some improvement but many would question this. Some small “social benefits” to some of the poorer section have been good but they are not really connected with a national minimum wage for our workers.
National minimum wage
Following the research of Prof Mahendra Reddy in 2014, it was suggested that Fiji introduce a national minimum wage of $2.32 an hour with a gradual increase every six or 12 months.
However, Nesbitt Hazelman in the name of the Fiji Commerce and Employers Federation announced publicly that they had prevailed on government to have it reduced to only $2.00 an hour. The same old story in the name of some of the Employers. Nesbitt goes ahead and registers his complaints in the name especially for some of the richer people in the garment industry, elements of the hotel and tourist industry and of the security industry.
Government did change it to $2.00 but later restored it to $2.32 an hour. This year (late 2017) it was restored to $2.67.
This is totally inadequate from a justice perspective justice. This is particularly true when we remember that the cost of living has increased significantly.
Moreover, when purchasing goods and services with this wage, 9 per cent goes back to government in VAT. The national minimum wage should be measured against the current basic needs poverty line which is around $4.50. At least we can push for a national minimum wage of $4 (or $5) adjusted each year.
Some employers excuse the low wages they pay by saying their workers are not “productive”. But how can you expect a worker to be productive if they have to live in substandard housing, cannot feed themselves and their family recent nutritious food, cannot afford proper medical care and the added educational costs for their children?
It is no wonder that we have so many in child labour, so many in prison, so many family disputes and social violence, so many people who have sickness because they are unable to eat proper nutritious food.
Addressing growing inequality by paying a just living wage to all our workers could make a huge difference in the lives of so many of our families. And it would ultimately save government a lot of court cases, prison rehabilitation and medical costs. And it would ultimately increase productivity.
Realistic increases in the wages of those in full-time employment are an urgent necessity and a serious matter of social justice in Fiji. In this regard workers’ unions and their leaders should be treated with equal consideration and the same respectful consultation as is given to employers’ groups and the employers’ federation.
What we have recently been told is that, in Fiji today, at least 527 individuals in Fiji earn or possess more than $1 million in assets which may include top businesses, corporate and public sector executives. They are the high rich individuals by the Fiji Revenue and Customs Service. What a degree of inequality.
Some of the top economists of the world have described the inequality and problems which our neo-liberal economic system has been causing around the world (Joseph Stiglitz, Thomas Pickety, Pascal Lamy, Ravi Batra).
Neo-liberal capitalism which underpins globalisation benefited a few to the detriment of the many and has been responsible for growing poverty and inequality around the world. The old “trickle down” theory is no longer accepted. It is mostly a deceitful myth. Nothing of the wealth ever trickled down to the masses
Over the years Fiji (like many other countries) has been following (or forced to follow) the policy directives of the World Bank and the International Monetary Fund (IMF) and the ADB which we are told will increase economic growth.
Yet at the Economic Forum held in Davos some time ago, it was agreed the policies of these international financial institutions (IFIs) had produced a frightening increase in poverty and inequality all around the world.
The words of the Melzer Commission in the US Congress still speak words which are worth repeating: “Neither the World Bank nor the regional banks are pursuing the set of activities that could best help us move rapidly toward a world without poverty or even the lesser, but more fully achievable goal of raising living standards and the quality of life, particularly in the poorest nations of the world.”
It is disturbing to note that many of those in our Ministry of Economy have been trained by economists from the World Bank or the ADB.
Have they studied the growing literature from the outstanding economists who are exposing the reasons for the growing poverty and inequality in our world because of the policies which these institutes advocate? When will we wake up?
So many of our people do not wish to give up on the workers of our country. We will continue to speak out on their behalf and hope our protest is seen as a protest against the injustices perpetrated on our workers. It is a stand against greed and selfishness and a lack of concern for needs of workers and their families.
It is a stand for justice. Our concern about wages has been motivated in large part by the growth in poverty and inequality and the serious effect it has on the families of workers.
Many economists (some previously of the WB, the IMF and WTO) have been sounding serious warnings about the economic system of extreme neoliberal, free-market capitalism which underpins globalisation. In particular they associate growing poverty and inequality with this extreme form of capitalism and call for a more inclusive form of capitalism which promotes the common good — not individual or corporate greed.
It is not simply a matter of having greater economic growth. The economy should work for the benefit of all — not just a few. Economic growth needs to be better distributed with a greater sense of fairness and justice if we are to talk about true “development”.
This will demand progressive taxation, decent wages for workers, social justice programs, and an ethic of sharing and concern for the common good as opposed to the growth of greed and individualism for a few.
* The views expressed are the author’s and not of this newspaper.