Minimum wage raise supported
The President of Samoa Association of Manufacturers and Exporters (S.A.M.E.), Tagaloa Eddie Wilson, has welcomed the minimum wage increase.
He said it was anticipated and it has not come as a shock.
Effective on 1 January 2020, the raise brings the minimum wage to $3 tala, an increase of 70 sene.
During an interview with the Samoa Observer, Tagaloa said the adjustment is one that the private sector had agreed to and could afford.
He pointed out the minimum wage is only an entry rate for beginners, school leavers that do not have qualifications or experience. It should not be used to “suppress” workers wages, he said.
“I would imagine that businesses will not be hiring those type of workers in the next couple of months – but it depends,” he told the Samoa Observer in an interview.
“I think its good and workers can anticipate a slight increase in various wages [category], our business has already started adjusting rates end of last year.
“But there are also businesses that are still paying minimum wage even to those that have worked for many years and I don’t think it [minimum wage] should be used to keep wages low for casual workers…”
Tagaloa said if wages are kept low, workers then do not perform to their best.
“Workers should be compensated with performance and it’s a two way thing,” he added.
“Even at the retail shops level, the worker should be compensated based on performance and productivity and to suppress them to minimum wage level they cannot expect anyone to perform any higher.”
The S.A.M.E. President said people need to understand and be clear that the minimum wage is not relevant to those who have skills, qualifications and experience.
His advice to school leavers is to go back and enroll in a trade or a course to allow them to be paid more than the minimum wage so they can help their families.
Asked about the cost of the raise to the private sector, Tagaloa said for each employer, it would be an expected 10 per cent adjustment to wages of their workers.
With the private sector finding it competitive to keep trade workers, he said the increase will mean other wage category above the minimum wage level will also be readjusted to a 10 per cent raise.
“You will find that in the private sector in order for us to keep skill workers in our market we have to continuously review and pay them higher,” he said.
“It’s not easy for businesses to absorb increase in costs and businesses have been slow since the measles outbreak so its been tough…”
The President raised concerns of many skill workers leaving the sector so they can take part in the seasonal workers scheme.
He concluded losing skill workers to the seasonal scheme will only disrupt the private sector.
Government announced the increase from $2.30 to $3 tala last month, weeks before the Christmas holidays break.
In a statement from the Ministry of Commerce, Industry and Labour, the private sector was also asked to support the changes.
The business community, workers and State Owned Enterprises are hereby advised that as per Cabinet Directive FK(19) 44, the minimum wage is now approved to incremental increase from $2.30 to $3 tala per hour, stated the notice.
“We request that the increase will be supported by the private sector and State Owned Enterprises.
“The increase of the minimum wage is supported by the Samoa National Tripartite Forum [S.N.T.F.] after comprehensive consultation with key stakeholders.”