Narube: Minimum wage too low

Unity Fiji party leader Savenaca Narube. Picture: FT FILE

THE Unity Fiji party is examining innovative options that may be more appropriate and fairer to both workers and their employers.

Party leader Savenaca Narube claimed the current minimum wage was too low to provide the dignity of life to unskilled workers.

Fiji’s national minimum wage currently stands at $2.68 an hour.

“I strongly believe that the setting of the appropriate level of minimum wages needs to be fair to both sides,” Mr Narube said.

“The economy will be stronger when both sides are satisfied with the level of the minimum wages set by government.”

He said in economics, labour was treated like a commodity where employers demanded labour and workers supplied them. “Wages are simply the price of the commodity we call labour.

When the labour market is working well, the price of labour (wages) is determined by its supply and demand.

When labour is scarce, wages tend to go up and when it is abundant, wages tend to go down.

“The economics of supply and demand in the complex labour market breaks down especially at the unskilled segment where there is oversupply of labour which may lead to exploitation. Under these conditions, I consider it relevant for government to intervene and set minimum wages for that segment of the market.

“From the worker’s side, a fair minimum wage for the unskilled worker is one that his or her family can survive on.

“In my calculation, the minimum wage using the poverty line is $4 an hour, assuming an eight-hour-day for five days.

“Employment, productivity, and inflation are also relevant issues for consideration. Workers may not be better off with higher wages if prices rise.

“Therefore, the purchasing power of wages and productivity will have to be considered as well as the creation of more jobs.”

Mr Narube said they would announce a much fairer policy in relation to the national minimum wage in their manifesto.

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