Increase Minimum wage with staff upskilling

By Sapeer Mayron 17 January 2019, 12:00AM

Members of the private sector agree that the minimum wage needs to increase, with all due care. 

But capacity building, and the wider business context need to be considered too, they say.

Next week consultations begin with the Samoa National Tripartite Forum (SNTF) on a review of the Labour and Employment Relations Act. Among others, one consideration will be on raising the minimum wage.

Tagaloa Eddie Wilson, president of the Samoa Association of Manufacturers and Exporters said increasing the minimum wage is important but comes with other responsibilities.

“We have got to look at increasing productivity, and building capacity for a competitive workforce,” he said.

“The key thing is definitely to afford it. If we increase productivity we’ll be able to pay staff more.”

In the manufacturing and exporting sector, workers are only paid minimum wage of T$2.30 while they are new, unskilled trainees, Tagaloa said.

As soon as they have a skill their pay increases to T$3 or $4, and with qualifications can be between $6 and $14.

“And that’s not including management level,” he said.

Tagaloa believes in training, first and foremost, to improve the sector and bring more money to the economy. That training has to be affordable too, he said.

“But definitely what we need to do is support more training, make sure there is more upskilling, and that workers can afford the training costs. 

“School fees are expensive. There is no use in providing training programmes if they are unaffordable.”

Also taking a broader perspective is Asiata Alex Brunt, general manager of Ah Liki Investments.

Speaking in that role and not in his capacity as a Chamber of Commerce member, Asiata said if minimum wages are increased, government should take a close look at policing the change.

“The other thing that must be looked at is the policing of not only paying the minimum rate, but also paying the N.P.F, A.C.C and taxes for their employees,” Asiata said.

“That’s something that ministries should really police. If someone is deliberately not doing it they should be penalised. 

He said if government does eventually move to raise the minimum wage, it should consider adjusting import duties and other taxes on businesses to help them cope with the adjustment.

“If costs go up, prices naturally go up. 

“If we raise minimum wages and the government can help by lowering some of the duties, then hopefully it will lessen the impact and therefore not require an immediate sharp increase in prices,” he said.

Asiata said he already pays his employees from a starting rate of T$3, and that his company would support a wage increase. He said while he knows it’s the right thing to do, he can’t expect other companies to follow suit until a change is legislated.

“You can’t expect some companies from the goodness of their own hearts to do it because then they will not be competitive in the market.”

“We are not only looking at the cost of business, we are also looking at how competitive we are against imported products, how competitive we are for our products that are being exported,” he said.

By Sapeer Mayron 17 January 2019, 12:00AM

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