Businesses express views on National Minimum Wage issue
November 4, 2018 6:16 pm
Some politicians from certain political parties who are looking at significantly raising the National Minimum wage are not fully aware of the negative impacts it will have on the economy.
Fijian Holdings Limited and Modern Electric Limited raised their concerns with FBC News on how some figures put forward by politicians could close down their businesses and lead to major job losses.
Modern Electric Operations Manager, Shaveer Abdul Aziz says this will have adverse effects on most of the employees in different sectors.
“Though it will make one think that it would mean more money in the pockets of employees but it will be more complex in real life. Like cost of goods and services for instance will increase to make up that significant increase in wage rate. Should that not be the case then businesses will either reduce staff or simply shut down.”
Aziz adds many formal sectors pay their employees more than the minimum rate due to the current economic stability achieved through investments and developments.
Fijian Holding Limited CEO, Nouzab Fareed says the minimum rate is only for unskilled workers which will obviously increase according it one’s performance.
“It’s got a cascading effect on all other wages. For example now $2.60 or $2.70, if it had to increase to $5 then it may represent seventy to eighty-five percent increase. Are you going to tell me that every wage in this company is going to increase by another 60% or 70%? And they don’t know the fact that if you’re going to increase the minimum wage, we as a management we got shareholders, they will not be willing to absorb the cost, so what do we do? We pass it on to the consumer.”
Fareed also pointed out some of the initiatives laid out in some political party manifestos.
“If you’re going to remove VAT from fifteen items, government is going to lose a certain amount of tax revenue from where are they going to recover or are they going to borrow again. So it’s just like they showing you one side. Social pension scheme, if they want to increase the amount it’s beautiful, we love it but from where will they get the money.”
The businesses say that Fijians are smarter and understand the consequences behind such vote buying motives as its just false promises.