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300 jobs lost since new minimum wage in effect

SUVA, Fiji (Fijilive, Feb, 16, 2009) –

Wages Council chairman Father Kevin Barr has downplayed claims by Fiji’s garment industry that the approved 20 per cent wage rate increase [caused] job losses.

Instead, he said it was quite probable that the garment industry in Fiji may be hit by the global economic downturn, thus the loss of jobs.

Textile Clothing and Footwear Council of Fiji (TCF) president Kalpesh Solanki had said that 300 jobs had been lost subsequent to the 20 per cent increase in wage rates, and warned of 1000 further job losses to follow.

"Threats of job losses because of small wage increases in the garment industry have created fears of massive unemployment around the country," Barr said.

"The tactic of using threats of job losses and factory closures is not new and could well be expected from some industries," he said.

"Research carried out in other low income countries have shown that when wages are increased, employers will always threaten job losses or complete factory closures. However this rarely happens but the fear tactic is very powerful."

"In fact, it is quite probable that the garment industry in Fiji may be hit by the global economic downturn and have to cut back on staff but not primarily because of any wage increase.

"This (wage rate increase) may simply add to the problem but not be the major cause. Any good business person has to factor in any increases in the cost of doing business, including labour costs," Barr said.

He said after three years, employers in the garment industry should have factored in wage increases measured by rates of inflation.

"The loss of jobs in the garment industry and the closure of factories have already happened over the past ten years due to changes in trade agreements, etcetera," Barr said.

"It has been a sad decline but Fiji has coped with it. Even if it happens again, Fiji will cope with it and workers will find jobs elsewhere as they did in the past."

Barr said there had been much noise about a 20 per cent increase in the wages of garment workers.

He said it was easy to exaggerate when using percentage when in fact, the increases are from $1.25 to $1.50 and from $1.48 to $1.78.

"Both increases were staggered over a six month period to satisfy the request of employers for a gradual increase but it seems they are still not satisfied," Barr said.

"These wages in the garment industry remain the lowest in the country and had not been changed for over three years. The increases barely cater for inflation over those years," he said.

"The outcry from employers in the industry seems quite outrageous."


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