INFORMAL sector workers who account for the largest workforce may not be benefiting from the increased minimum wage, says the Fiji Commerce and Employers Federation (FCEF).
FCEF chief executive officer Edward Bernard said while all formal sector workers benefited from the new wage rate, informal sector workers did not have the same advantage.
“Businesses operating in the informal sector may not be able to afford it or have the same level of compliance scrutiny compared to the minority formal sector workers,” Mr Bernard said.
“At the end of the day, the majority of the workers do not benefit.”
He said components of employment such as increased minimum wage could not be viewed in isolation.
“We need to look at all of them in light of the socio-economic situation our island nation is operating under.
“We are not a developed country.
“We need to grow and work towards being one in a sustainable way.”
Since the new minimum hourly wage of $5 came into effect on April 1, Mr Bernard said their members had been given time to comply with the change.
“As far as we know, our members have all implemented the new rates,” he said.
“There has been ample time given to employers and employers have followed the law.”
Mr Bernard said the FCEF was not complaining about increased minimum wages.
“There is a huge productivity-pay gap in Fiji.
The concern is how the rates are determined and in relation to (a) the other costs cumulatively increases in the cost of doing business and (b) low productivity rate.”
He said when the cost of doing business increased and productivity decreased, employers would eventually transition to automation and digitalisation.
“Some employers, particularly those that can invest in new technology, have started to move in this direction.
“This then requires new skills not available locally and therefore skills need to be imported from abroad.”
Note: This article was first published on the print version of the Fiji Times dated April 15, 2025
