Thursday, September 29, 2011

Rethink minimum wage rise

Source: yutok, Post Courier, Thursday Spetember 29 2011

 THE politicians are at it again – saying and doing anything and everything to buy their way into parliament. Free education, approving the minimum wage, scrapping the current Hecas scholarship scheme in favour of Natschol where students receive direct cash allowance, spending K4 billion on sports, passing the reserved seats for women etc.. the goodies list just goes on expanding week after week.
I do not know the rationale of increasing the minimum wage when the government is simultaneously funding free education which will increase the supply of graduates on the job market. When you increase the labour supply, the price of labour will fall, but then the government makes it illegal for the employer to hire people at a lower pay. This means a lot of young people out there looking for work or work experience won’t be able to find the work or get the job experience they need. On the job training opportunities will dry up. Shops, night clubs and small businesses that employ young people with grade 10 and grade 12 certificates, especially females, will now refuse to employ more because they have to pay a lot more. Consequently girls are more likely to turn to other things where they will be paid more money. We can expect with certainty unemployment, crime to increase, frustrating queues at the banks, service stations and all the shopping outlets – all thanks to the government.
How can the government spend K4 billion on the SP Games when it has not even addressed the substantive remuneration issues facing our doctors, nurses, teachers, policemen and defence personnel? That mony can address their concerns, improve the Port Moresby General Hospital and all provincial health centres, buy new medicines, improve the classrooms and facilities in all schools and subsidise travelling costs domestically for the most disadvantaged or isolated villages so they will have access to markets and basic health and education services. Where is the government getting the K4billion money - from LNG export revenue? This revenue flow is limited to only three decades, so we should be very careful on how we spend LNG revenues. We should be spending this money on where it will generate the most good to most people,
Port Moresby

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