Joining the dots in the minimum wage debate and hoping for the best for Samoa
$2.30 is legally the minimum wage in Samoa – not even enough for a loaf of bread in an Apia supermarket. One would need another .20 sene to buy bread, and even more to get a tin of mackerel.
Working Samoans have been doing it tough over the years – seeing their hard-earned wages lose its buying power – as inflation drove up the cost of living and made the prices of food and basic household items out of reach of ordinary citizens.
Research from around the world show a strong correlation between increasing poverty, crime and even violence to the lack of access by citizens to decent wages, and income generation opportunities to look after themselves and or their families. The weekly pages of the Village Voice column in the Sunday Samoan highlight the plight of poverty-stricken families in need of water and recent Ministry of Police data worryingly confirm a spike in crime. Are these trends connected to the inability of citizens in Samoa to survive in this day and age?
There is a lot of expectation and pressure on Prime Minister Tuilaepa Dr. Sa’ilele Malielegaoi to heed the calls to increase the minimum wage. But the Prime Minister, as he rightly pointed out in a press statement, cannot act unilaterally without consulting the private sector.
“We all want to raise minimum wage but it has to be a measured increase and at a level the private sector can absorb,” the Prime Minister said.
“There is no point in raising minimum wage and immediately results in businesses closing down. Then all we will get is looking at a bunch of numbers while there are no jobs.”
Tuilaepa indicated that his administration is acutely aware about the calls to increase the minimum wage.
“There is a lot more to this than meets the eye,” Tuilaepa said. “Any raise in the minimum wage is dependent on private sector’s ability to absorb it among other related issues.”
“In making such a recommendation, the Ministry of Commerce, Industry and Labour (MCIL) take into account what government can afford, and especially the private sector.”
“MCIL also have to consider variables like inflation rates and its effect on disposable incomes. The key word here is affordability.”
We do not have to look far for an example of a government’s unilateral decision to raise the minimum wage, without consultation with the relevant local sectors. A U.S. Federal Government-imposed minimum wage increase of $7.25 cents per hour (compared to $3.26 per hour prior to the increase) led to the departure seafood packaging company Chicken of the Sea – which ran a cannery facility – from American Samoa. Another cannery operator, StarKist, is threatening to leave the American territory. The exit led to the loss of hundreds of jobs.
The Prime Minister is aware of the challenges in the neighbouring U.S. territory and is keen to ensure it doesn’t happen here.
“And when the issue resurfaced again the territories tuna processing industry was at cross roads and threatened to shut down operations in the territory because the new wages dictated by Uncle Samoa would lead to financial chaos for them.”
But now that the issue is out in the public domain and everyone is on the same page, it is perhaps time to forge new ground to address an issue that has been outstanding for a number of years.
In a positive, the MCIL indicated recently that it is in the process of reviewing the Labour and Employment Relations Act. The review will include timely discussions on the minimum wage.
“There is work to include a provision in Labour and Employment Relations Act to review the minimum wage every one, two or maybe every three years,” said Niuafolau Helen Uiese, assistant chief executive officer for the Ministry.
Consultation begins next week with the Samoa National Tripartite Forum (SNTF), and will be the first step towards addressing the viability of increasing the minimum wage.
“Any decisions that are made pertaining to promoting decent work in Samoa has to be consulted with all members of the tripartite forum,” she added.
The SNTF comprises State-owned enterprises, Government ministries, and the members of the Tripartite Forums including the International Labour Organisation (ILO), Chamber of Commerce, Women in Business Development Incorporated, Samoa Hotels Association, and the Samoa Association of Manufacturers and Exporters.
With everyone now on the same page, we can only hope for the best for Samoa and urge all stakeholders to ensure no stone is unturned in the push to find common ground.
We note the positive feedback from the major business houses in town and their plea for the upskilling of employees as a condition for a wage hike in a phase-by-phase process – it makes sense in this day and age.
We look forward to the beginning of the consultative process and supporting it for the benefit of Samoa’s working class.
Have a wonderful Friday Samoa and God bless.