Minimum wage must benefit whole nation, says M.C.I.L. chief
The Chief Executive Officer of the Ministry of Commerce, Industry and Labour (M.C.I.L.), Pulotu Lyndon Chu Ling, says there is evidence Samoa's poorest are missing out on the benefits of economic growth as the ongoing debate on the national minimum wage continues.
The comments come after it was reported this month that Dr. Vlassis Missos, a consultant hired by the Ministry and the Samoa National Tripartite Forum (S.N.T.F), concluded that the minimum wage should increase from $2.30 to $3.70 next January.
“There is evidence Samoa’s economy is increasing, however the poorest of the poor are not earning adequate wages to ensure [a] decent living,” Pulotu said.
Dr. Missos arrived at the figure of a $3.70 wage following 50 one-on-one sessions with stakeholders in six weeks for his research, which also recommended the wage be reviewed every two years.
A proposed amendment to the 2013 Labour and Employment Relations Act (L.E.R.A) supports Dr. Missos’ suggestion to review minimum wage every two years.
“This is generally the practice in all developing countries,” Pulotu said.
The final report will go before the S.N.T.F and be deliberated on by its members, which includes employers, workers and government, before submitting a final recommendation to Cabinet for approval.
Pulotu would not reveal when this would happen, but said he has several priorities in mind when making the decision: to provide works a “modest but decent living standard,” and to factor in whether private sector can afford it.
“All sides should acknowledge that the institution of the minimum is designed so as to offer protection to low paid workers and a fair share of the fruits of prosperity.
“Sensible increases may operate so as to boost local economic activity upwards hence our priority is to recommend a minimum wage that would be beneficial for the Samoan society as a whole.”
As well as the 50 stakeholder sessions, and a public consultation, Dr. Missos had several national surveys to call upon for his research: the Household Income Expenditure Survey 2013, Samoa Hardship and Poverty Report, Labour Force Survey 2017, Dietary patterns of household in Samoa, and the Samoa National Provident Fund wages for formal sector, among others.
Last week, Samoa Association of Manufacturers and Exporters (S.A.M.E) President Tagaloa Eddie Wilson said the proposed increase was too steep, and would lead to job losses and business closures, because of a gradual increase to S.N.P.F contributions being implemented too.
“You are looking at two things being forced to happen at the same time,” he said.
“The concern is that if you are to combine that increase with an increase in minimum wage of this level you are looking at a very difficult situation for the private sector, and it can result in a potential loss of employment.”
Tagaloa is not against a minimum wage increase, but he wants government to ensure private sector can absorb the shock to business.
Meanwhile, workers' union Samoa First organiser Saina Tomi said hearing Dr. Missos recommend even more than the $3 goal they campaigned on made her happy.
“$3.70 is a good figure, it’s fair for both sides: for the workers and the employers,” she said.
In May, the International Monetary Fund (I.M.F) also made a call for a $3 wage, in part due to consultations with Samoa First Union.
Samoa has the lowest minimum wage among Pacific Island countries and it is time to increase wages due to high levels of unemployment and large number of informal workers in the country, the I.M.F said.