Merging 10 Wages Councils into One: going backwards —- An email from Professor Wadan Narsey

Merging 10 Wages Councils into One: going backwards

Or, how Bainimarama solves a problem of his own creation

Professor Wadan Narsey

Fiji’s 10 Wages Councils have developed over 40 years of experience at trying to improve the wages of tens of thousands of workers who are not represented by unions, by annually adjusting minimum wages separately for each industry.

Since the 2006 coup, employers have managed to get these adjustments postponed, because the economy was not growing. But now, supposedly to save taxpayers’ funds, the Bainimarama Government has made a unilateral decision to merge all the 10 Wages Councils into one, which will set one national Minimum Wage.

Here’s yet another unilateral Military Government decision which is going to hurt the poorest workers of Fiji.

There have been many such decrees and commands, as in price control (medicines and hardware) and education policy (school zoning, limits to fees, end of examinations). Most measures appear sensible on the surface, but result in serious unintended negative consequences, which far outweigh any benefits.

The problem is that most of these Bainimarama measures try to treat symptoms, when the fundamental cause is the economic stagnation caused by the Military coup itself.

Some measures may be easily reversed when Fiji once more has an elected and accountable government in place. But some policy changes, like those in education and Minimum Wages, may take the country years to recover.

Meanwhile, the current vicious media censorship stops any public discussion of these policy changes being promulgated by an illegal Military Government and its arrogant functionaries, all experimenting with our people’s lives, without any accountability.

Bainimarama, Khaiyum, Bole and others, are now behaving like “normal” Ministers of Government, except that they are totally unaccountable and totally out of control.

The Origins of the 10 Wages Councils

Over the last forty years, Fiji slowly evolved towards setting different minimum wages for workers who are not protected by unions (some thirty thousand workers), in different industries, through 10 different Wages Councils.

There is now one Chairman (Father Kevin Barr) who has been encouraged to make consistent decisions for each industry following the same methodology, supported by the Ministry of Labour Secretariat.

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But, a few days ago, the Permanent Secretary of Labour (Mr Taito Waqa) announced that all the 10 Wages Councils will be merged, in order to save money, he claimed.

There will now be only one National Minimum Wage, which will supposedly take into account Fiji’s Gross Development Product and productivity of the workers, by some formula to be determined by economists, employers and other stakeholders.

Saving tax-payers’ money by having only one Wages Council Board and fewer meetings sounds so reasonable, don’t it?

But Taito Waqa totally ignores the historical and very sensible reason for the 10 different Wages Councils: which was to allow different minimum wages for different industries, given that they not all perform the same way in the Fiji economy at any point in time.

Some sectors can be doing very well (as the tourism industry is currently) and can afford moderate wage increases, while others can be under great pressures from international forces (such as the garments industry) and may not be able to afford even small wage increases (despite the increase in cost of living).

Having different Wages Councils has enabled different boards, drawn from expertise in the related industries, determine wage increases tailored for each industry. Each Board has been able to take expert account of the health of the industry, the capacity of the employers to pay, the productivity of workers in that industry, the basic needs poverty line, and the changes to the cost of living.

Should any employers not be able to pay the increases ruled by the Wages Council, all they had to do was show their audited accounts to the Chairman of the Wages Council and obtain the appropriate concession.

But not a single employer has done that over the last two years.

No audited accounts but secret pressure

Instead, influential employers applied secret pressure on Bainimarama, Khaiyum and Filipe Bole, to ensure that Wages Council Orders were postponed month after month.

And now they have succeeded in getting all the Wages Councils to be merged into one, with one minimum wage for the whole country. We know what will be the likely results.

To satisfy all the employers, the National Minimum Wage will be set at the lowest possible that can enable the worst paying industries, like the garments industry, to survive.

Of course, some struggling industries may be helped in the disastrous times that the economy is going through. But there will be some employers, whose industries are doing

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reasonably well (like tourism), who will now be able to get away with lower wage increases, and make larger profits.

The net result will be worsening standards of living the more than thirty thousand of workers, of whom more than 70% are earning below Fiji’s Basic Needs Poverty Line.

If the Military Government had been genuine about saving money, they could still have had one Wages Council, BUT still determine different minimum wages for all the different industries. But, the real objective of the employers was to do away with the higher minimum wages being set for different industries.

Note that some tourist resorts who have been making good profits still lay off the allegedly “casual workers” who have been kept as “casual” despite years of employment.

Father Kevin Barr in tears

Why was Father Barr, the Chairman of the 10 Wages Councils, seen to be in tears on Fiji TV, while responding to this draconian decision by the Military Junta?

Father Barr sadly related on TV that he had not even been consulted on the decision, despite his being the Chairman of all the 10 Wages Councils.

Hopefully, Father Barr now knows that Bainimarama, Khaiyum, and Bole, all care more about the views of employers than they do about the thousands of poorest families who depend on the Wages Councils to protect their standards of living, or the Charter principles that they hypocritically claim adherence to.

Barr and all the other “do-gooders” who joined the coup bandwagon in 2006 also need to rethink their support for the 2006 treasonous coup.

Because it was the 2006 coup which has resulted in employers pressurizing Bainimarama to remove the 10 Wages Councils.

Bainimarama’s coup and minimum wages

Had the economy been growing healthily, the employers federation would not have bothered to put any pressure on the Military Government, as many good employers pay better wages than that required by the Wages Councils.

But the Fiji economy has now stagnated for four years after Bainimarama’s coup, largely because investments (both foreign and local) have dried up, following Bainimarama’s military decrees seizing private company’s assets and military decrees stopping certain cases from being taken to court.

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Without economic growth, incomes have not risen in nominal terms, and fallen seriously in real terms because of inflation, worsened by the devaluation and increase in VAT this year (to counter falling Government revenues).

Many employers’ profits have been reduced and would be reduced further were they to pay the minimum wages ruled by Kevin Barr’s 10 Wages Councils Orders.

But instead of showing their audited books to the Wages Council Chairman to justify why they cannot pay the wage increases, they have simply taken advantage of the current slump to convince Bainimarama to throw away the 10 different Wages Councils altogether- effectively “throwing out the baby with the bathwater”. As employers have done many times in the previous forty years (see my study for ECREA Just Wages in Fiji.).

Civil servants collaborating with coup

One sad result of this Military coup is that our civil servants are now all too ready to justify to the public what are essentially political decisions made by illegal Military Ministers.

Why did Taito Waqa (PS Labour) make the spurious claim that the Wages Councils were being merged in order to save tax-payers money?

This Military Government has wasted hundreds of millions of dollars of tax-payers’ money and continues to do so. Merging the 10 Wages Councils may save a hundred thousand dollars, but effectively reduce the incomes of the poorest workers by millions of dollars (and increase the profits of employers by that amount).

As Barr has often stated, it has been employer pressure that drove Bainimarama’s decision on Wages Councils, not the saving of a hundred thousand dollars for tax-payers.

PSC Chairman (Jo Serulagilagi) should explain to Fiji tax-payers why civil servants like Taito Waqa are callously justifying political decisions by the Military Ministers. When will he tell civil servants to go to go on record and state that a particular decision is a political one by the Minister, and let the Minister take responsibility?

Similar charades are also going on at FNPF, with Aisake Taito (CEO) refusing to make public the recent studies that show the non-sustainability of the Fiji National Provident Fund. Taito also continues his spurious claims in every Annual Report about FNPF’s adherence to transparency and accountability to FNPF members.

Now a “Normal” Government!

Keep reminding ourselves that this Military Government has totally departed from its original coup justification- establishing electoral fraud, weeding out corruption, ensuring

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an honest and accountable government, with no military person ever profiting from the coup. We can see now that these claims are blatant lies.

Now it is “Government” business as usual. Except that unlike elected Ministers previously, Bainimarama, Khaiyum and Bole have multiple portfolios and apparently multiple salaries paid through a private company (not denied).

The only facts being made public, usually by Khaiyum, is any fragment of data that can put a spin on Government performance, such as tourism arrivals, presumably also the result of Khaiyum’s leadership on tourism drives up North (does he not trust Tourism Fiji and Jo Tuamoto?).

Bainimarama and Khaiyum embark on a phenomenal number of costly international trips (all Business and First Class, of course)- far more than ever done by any previous legal Ministers- except that the Bainimarama Government is totally unaccountable for the costs, or the activities being engaged in, allegedly on tax-payers’ behalf.

Bainimarama and Khaiyum are enjoying themselves thoroughly, dishing out our tax-payers’ funds (for roads, bridges, water, housing, etc), buying and selling tax-payers’ assets, or borrowing hundreds of millions adding to our Public Debt- as all legitimate elected Government Ministers have done in Fiji for decades.

And this is now the fifth year of their manipulation of hundreds of millions of tax-payers’ money, without a single Auditor General’s Report being made public.

And now the Bainimarama/Khaiyum Military Government will convert the 10 Wages Councils into one, and set one Minimum Wage, hurting the tens of thousands of the poorest workers in Fiji.

Who gave Bainimarama, Khaiyum and Bole, the right to change Fiji’s Minimum Wages legislation? Themselves, of course, armed with the guns we tax-payers gave them, for our protection.

Democracy advocates focus on Bainimarama and Khaiyum as the coup leading lights. But there are others whose critical support enables the Bainimarama Government to continue destroying our country: the senior military officers, the former military commanders, the many powerful businessmen, the principals of the accounting, auditing, and legal firms who are making tons of money from this Military Government, and those citizens and residents who have accepted board positions and provide public legitimacy to this military government. Let us not forget them.

Our meek Fiji citizens can expect many more years of costly illegal manipulation of the Fiji economy and taxpayers’ funds, according to the personal agenda of Bainimarama and Khaiyum, and their business mates and other coup supporters