[Fiji] Low wage rate cause of poverty: Report

from Fiji Times

The worsening level of wages paid to workers, who were supposed to be protected by State-appointed Wages Councils, is a major cause of poverty amongst wage and salary earners.

This was one of the findings of a report titled Just Wages For Fiji: lifting workers out of poverty by Doctor Wadan Narsey which was launched by Vice President Ratu Joni Madraiwiwi at the University of the South Pacific yesterday.

In its executive summary the ECREA-commissioned report and book stated the Government had 10 Wages Councils in operation for more than 35 years but found the councils have not been as effective as they could have been because of institutional weaknesses.

It said the Fiji economy had a very poor record of private sector investment and referred to the coups of 1987 and 2000.

"Whatever profits that have been made, have, in all probability, been expatriated for security and to guard against devaluation of the currency," it revealed.

The report said the perception of increased risk of doing business in Fiji harmed workers from three fronts.

"It firstly and directly encourages employers to maintain wages as low as possible so that they can 'make money while they can'."

"It secondly discourages them from re-investing money into their enterprise which could raise productivity of the employees.

"And thirdly, it has discouraged investment in the Fiji economy in general, thereby depressing the general demand for labour in the market, which could have provided alternative employment opportunities," it said.

In launching the report, Ratu Joni said it was in our collective interest that employers make profit but if these were consistently earned at the expense of fair remuneration for wage earners without proper assessment it was counter productive.

Ratu Joni said in the long term it would become detrimental to social peace and stability and what it creates was an emerging underclass that was unable to make ends meet and whom the government in turn had to make provision in its poverty alleviation programs.

"What it concludes is that the levels of remunerations set by these councils in the Wages Regulation Orders are sadly inadequate to meet the basic needs of workers."

He said the purpose of Wages Council and the orders they made was to provide a minimum wage rate for the respective industries they covered.

These rates would establish at a level to adequately sustain workers and their families and there was a recognition of a need to protect those that did not have the benefit of unions to protect their interests.

"This approach appears to have been abandoned a few years after its inception. For reasons which are set out in this study the prevailing argument is becoming the employers ability to pay.

"This appears to be largely accepted in the absence of a more independent role by the Ministry of Labour and lack of assertive stance by workers representatives on the Wages Councils," he said.