Take a deep look at minimum wages

IN the middle of so much going on few might have noticed our news item last week quoting a concern by economist Paul Barker about the minimum wages applicable in the country.
Baker pointed out that the current minimum wage of K3.50 has been in place a long time and said it would make it difficult for urban dwellers to survive.
He said employers and employees needed to have constructive dialogue including through the National Tripartite Council to discuss measures that could boost productivity in association with wages adjustments.
Minimum wages need not be paid.
They merely set a minimum measure below which it would be impossible for a wage earner to survive.
Workers and employers would normally negotiate formally or informally on wages to be paid considering the skills of the worker to contribute to the productivity for the operation and the company’s ability to pay without jeopardising its own existence.
From time to time, such wages would be reviewed and adjusted in line with the contributions by the worker to company success as well as external economic circumstances including living cost adjustments.
As income tax comprises the bulk of Government revenue it behooves Government to take a long hard look at this area.
There is no wages parity levels in this country except the minimum wages scale.
At one end of the scale, some companies operating in the agricultural sector or the public sector in the local level governments, can hardly meet minimum wages conditions.
To bring them up to full compliance would incur such increases in costs so as to affect the viability of a business or an operation.
At the other end of the wages structure, there are those companies in the resources sector or at the top end of the State Owned Enterprises management posts where people seem to write their own contracts, awarding such salaries, perks and privileges that are insane when compared to our minimum wages.
There is no balance or there doesn’t seem to be one.
Unions once upon a time played the role of collective bargaining on behave of the silent worker who on his or her own could not negotiate a fair price for their labour.
The Trade Union days, it seems nowadays, seem to be numbered in the day of heavy mechanization and artificial intelligence.
In an ideal economy wages and prices are dictated by market forces and there is no need for regulation.
Minimum wages are really introduced to pick up the lower end of the wages ladder to ensure a salary is sufficient to meet the most basic needs of a household over the wage period.
PNG cannot be said to have an ideal economy.
K3.50 per hour on an eight hour day amounts to K29 per day and that would fetch K290 per fortnight of a five days working week.
Making that amount stretch over a fortnight for a single person might work but for a couple with only one working partner or a family of three, it would require some magic jiggling.
An impossible hypothetical situation of somebody living on one meal a day of one small canned fish (K5), one packet rice (K6) and some vegetable (K2) already takes up K182 in a fortnight (14 days x K13) leaving only K110.
And that is not counting accommodation costs, bus fares, lunches, bills, toiletries and other necessities which will very quickly and easily take up that balance, always leaving the minimum wage earner in the red before the next pay day comes around.
If such a person borrows and that is the only way most families survive in urban areas, it is virtually impossible to break loose from the cycle of debt.
Under such a situation and faced with starvation conditions it is easy to see how one could very easily fall into temptations to take short cuts, to steal, and engage in unlawful activities to make ends meet.