Minimum wage : should workers in all sectors be subject to the same minimum wage?

The minimum wage will be decided in the coming month. The amount proposed by various trade unionists is above Rs 10,000. Some of them have even claimed a minimum salary of Rs 15,000. However, some opponents believe that it is difficult to have a minimum wage for the different sectors. Some sectors are already facing difficult situations and in such cases, some enterprises will either close their doors or make workers redundant. 

Earlier this year, the Chairman of the National Wage Consultative Council, Beejaye Coomar Appanah, revealed that the minimum wage will be calculated as a proportion of the domestic median wage, the same method as adopted by all countries having a national minimum wage. It will cater for three categories of workers, namely: full-time workers and part-time workers; young persons aged 16 and 17 and apprentices. According to Statistics Mauritius, there are currently around 400,000 full-time employees among whom 20,000 are earning less than Rs 3,500 per month, 40,000 earn less than Rs 5,000 while around 100,000 employees receive less than Rs 8,000 per month.

Amar Deerpalsingh, President of the Association of Small and Medium Enterprises, believes that for certain sectors, it is difficult to apply minimum wage whereas Rashid Imrith, trade unionist, argues that each and every worker should benefit from a minimum irrespective of the sectors.

Amar Deerpalsingh : “A system which reflects the need for each sector”

The President of the Association of Small and Medium Enterprises, Amar Deerpalsingh, states that certain sectors like textile and exports are already facing difficult times and putting a burden on them will only worsen their situation. “The EPZ employs around 45,000 persons. The basic salary in this sector is around Rs 5,500. If we impose a minimum wage on sectors that cannot remunerate employees, the sector will eventually disappear and hence the employees will be jobless. We have different remuneration orders for different sectors, so why not implement a system which reflects the need for each sector.”

If we impose a minimum wage on sectors that cannot remunerate employees, the sector will eventually disappear and hence the employees will be jobless."

He further explains that if a person feels he needs more in terms of salary, he has the possibility to upgrade his skills and move to another sector. “Today, people have the choice to move within sectors if they are not satisfied. The only issue to be addressed is skills management. If tomorrow some sectors close their doors, the rate of unemployment will further rise. It will be the employers who will have the bargaining power and in this situation, the employees will lose. We cannot take decisions to the detriment of employees.”

For the union president, with this new system, the consumers also will be at lost. “There is no doubt that with this system, the standard of living will be high. For example, for a small car servicing, if a consumer was paying Rs 1,000, he could see the fee is rising even more. The reason for this is that the garage will have to increase the salary of its employees. Besides, if the salaries of cashiers, store keepers and other staff members increase considerably, services and products will obviously know an increase as well.”

He states that if Mauritius wants to progress, it needs to be more competitive. “In order to be more competitive, we need to produce basic products.”

Rashid Imrith : “All workers from any sector should benefit from a minimum wage”

The President of the Federation of Public Sector Unions, Rashid Imrith, contends that all workers irrespective of the sector should benefit from a minimum wage. “We have always been hearing that some sectors will face various issues when this system will be implemented. But a solution can be found. Certainly there will be a transition period for various enterprises. Similar to the introduction of the negative income tax of Rs 10,000, the government can come to the rescue of those enterprises facing difficulties with the introduction of minimum wage.”

As at present, the median is Rs 10,200 and no individual should receive an income below Rs 10,200 irrespective of the sector."

He disagrees with the fact that, with the introduction of minimum wage, factories will be closed. “The enterprises or SMEs need to prove their difficulties to the government. A solution can be reached. Usually, the percentage of the median salary is used for calculations. As at present, the median is Rs 10,200 and no individual should receive an income below Rs 10,200 irrespective of the sector.” For the trade unionist, the minimum wage should be around Rs 15,000 for a decent living.