National Minimum Wage and Inclusive Development: The Role of Labour Markets in Fiji: A Report Prepared for the Ministry of Employment, Productivity and Industrial Relations

The efficacy of the minimum wage policy is a widely contested concept in modern economics. The source of contestability is the standard analysis based upon a few focal points related to the economic consequences of minimum wages. In this submission I will argue that the focus of this study should be to understand and estimate the impact of the increase in the minimum wage in a number of dimensions, including employment, as part of the policy evaluation. The overarching goal of the policy of a statutory minimum wage is to ensure that the unskilled or semiskilled workers in an imperfectly competitive labour market of Fiji receive a “decent wage” for achieving a minimal standard of living. It is imperative to stress that the minimum wage policy must not adversely impact on productivity gains compromising the competitive edge of Fijian firms in global and regional markets.