18 Jan 2019

Samoa PM cautious about possible minimum wage increase

4:50 pm on 18 January 2019

Samoa's prime minister says any increase in the country's minimum wage will depend on the ability of the private sector to meet the increase financially.

Samoa PM Tuilaepa Sailele Malielegaoi

Tuila'epa Sa'ilele Malielegaoi Photo: RNZ Pacific /Autagavaia Tipi Autagavaia

Tuila'epa Sa'ilele Malielegaoi's comments follow the recent introduction of large pay increases for public servants over the next three years.

In a statement Tuila'epa said that any rise in the hourly wage was up to the private sector.

He said any rise was dependent on the sector's ability to absorb it and the key was affordability.

Tuila'epa pointed at the mandated federal minimum wage imposed by the US Congress on American Samoa some years ago that led to the closing down of the Van Camp fish processing plant.

He said there was no point in raising the minimum wage and then immediately having businesses close down.

The Samoa Observer reported that the Chamber of Commerce CEO Lemauga Hobart Va'ai supported the government view.

Lemauga said robust and strong consultation between the chamber and government was what was needed before any increase was proposed.

However, senior managers at two of Samoa's biggest private enterprise employers agreed that the minimum wage needed to be reviewed.

The Financial Controller of Frankies Wholesale and the General Manager of Ah Liki Investments agreed that the wage should be increased and welcomed government moves to discuss the matter.

Ray Hunt of Frankies Wholesale said that while any increase in the minimum wage would cost the company, it would not affect their prices.

"Frankies has always absorbed any increases for wages and National Provident Fund contributions in the past and will continue to do so," Mr Hunt said.

"Personally, I applaud it. I think it's great for the worker and the community because the money goes straight back into the economy so everyone benefits, and the reality is that people clearly need the extra money."

Asiata Alex Brunt of Ah Liki Investments called the issue "an economic and moral one".

"I think there is a benchmark people need to earn to provide the basics for their family," he said.

He told the Samoa Observer that his company would support any increase in wages that were conducted sensibly without putting the economy at risk.

"While the cost of living continues to rise in Samoa and abroad, wages should be kept in line and ensure people can make ends meet," he said.