Our Minimum Wage, Unskilled Workers And The Informal Sector

We always tend to focus on the formal sector of employment. There are so many people in Fiji who are not part of the formal sector

Aiyaz SayedKhaiyum Attorney General I hope this years Diwali will bring joy and prosperity in everyones life. Rachelle Hooker Westpac Fiji general manager’s wife

The minimum wage of $2.32 per hour has been misinterpreted many times since its introduction. And it is obvious there are many who aren’t able to differentiate that the $2.32 per hour minimum wage is for unskilled workers only, especially in the informal sector. Whilst unions have continued campaigning for increase in this minimum wage, fact remains that this is the first time the unskilled workers especially in the informal sector, have been given a minimum wage. But this does not in any way mean that employers cannot pay their workers above this minimum wage limit. Many unskilled workers would attest that when the minimum wage was not introduced, there used to be so much exploitation whereby some used to get even $1.50 per hour or below. However, this minimum wage means unskilled workers are able to get a decent minimum wage. And as pointed out by the acting Prime Minister, Aiyaz SayedKhaiyum, Government continues to review this and depending on the analysis, they will make adjustments. So why can’t this minimum wage be increased dramatically to $4 or $5 per hour as being campaigned for by the Fiji Trades Union Congress? One has to be mindful on the link of unskilled workers to the informal sector and the smaller business – your corner shops etc. The informal sector cannot afford to pay such high wages and if it is introduced, then it would be better for them to do the work themselves than to hire someone else. Mr Sayed-Khaiyum had a good example of the involvement of the informal sector. “We always tend to focus on the formal sector of employment. There are so many people in Fiji who are not part of the formal sector,” he said. “We have many people employed in the informal sector also. “I stopped yesterday in Korovisalou and bought Kavika, bananas and coconuts and I talked to the ladies selling these. “They told me sometimes they make $200 a week, sometimes $250, and sometimes only $50 a week.” Mr Sayed-Khaiyum’s point was given, these women in the informal sector are not even able to generate much income, how would a not well-thought out minimum wage affect them and others like them? “Will it have an impact on the price of goods and services we buy? Will it affect their ability to hire their nephew who got out of school and wants to join their business?” he questioned. “Will they be taken to the employment court for not paying the $4 or $5 minimum wage? These are the critical issues you need to understand.”

Therefore, it is critical firstly that all Fijians understand the minimum wage rate of $2.32 per hour is for unskilled workers only, especially in the informal sector.

Secondly, it is imperative they understand the economics and the dynamics Government has based its decisions on. And most importantly, employers need to understand this is just a minimum wage and they can pay much more.