Barker: Difficult to survive on K3.50 minimum wage

THE current minimum wage (about K3.50) has been in place for a long time, making it difficult for an urban household to survive on this wage, says Institute of National Affairs (INA) executive director Paul Barker.
Barker said employers needed to have dialogue with employees over terms and conditions, including through the National Tripartite Council, including supporting measures for boosting productivity in association with wage adjustments.
“Care must be taken not to leave critical public sector workers behind; unregulated businesses, many of which neither pay minimum wages nor their required taxes, should be followed up vigorously to comply,” Barker told The National.
“The government needs to step up to be able to provide needed social protection arrangements for the most disadvantaged, or precarious in society (working with churches, non-government organisations and local governments) as well as greater support for school feeding programmes, not just for boarders, but some supplementary nutrition for day students also.
“Minimum wages are not the wages required to be paid.
“They are merely a minimum.
“Employers and employees would normally be expected to have formally or informally negotiated, or even had standard arrangements to progressively adjust remuneration or staff rewards to reflect changing market conditions, including business prospects, but also where possible, changing costs of living.
“Unfortunately, some businesses and employers are better able or willing to keep up with inflation than others.
“Clearly, if staff pay makes up a high portion of total business costs, and they rise fast, it can push up total costs, and viability of the firm, if the firm is unable to recover those costs from increased sales or higher prices for the goods and services it sells.
“Hence, with the minimum wages system that’s prevailed over years in PNG, there’s also been a ‘capacity to pay’ exemption, where applying the full minimum wage or its increase, in full, might jeopardise the entire business’s viability, or force it to extensively displace its workforce, or even substitute it through mechanisation, for example.
“So, no-one can call the jobs market fair.
“You may study and work hard in one career, but find demand for that skill displaced by new technology, or fashion, or even artificial intelligence (AI), leaving your pay low or your job replaced entirely, and you needing to reskill and seek new work.”