To'abaita Authority for Research & Development (TARD)

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Thursday, January 04, 2007

Solomon Government proposes new minimum wage for workers

The Solomon Islands Chamber of Commerce has proposed a new minimum wage increase from SI$1.50 per hour ($1.20 in fisheries industry) to SI$7.28 per hour.The Government’s rate is based on a newly estimated food price index.

According to the food price index, an individual needs to spend over SI$38 per day on food to have a healthy diet. This figure was divided by 8 to represent the hourly wage needed to afford this expenditure (with a 50 per cent increase added for dependents).

It is understood the Labour Division has already convened a preliminary consultation with stakeholders to discuss this issue on December 22 last year.

However, the Chamber of Commerce has outlined the need for a study on the economic impact of an increase in the minimum wage to be conducted by the Central Bank.

Chamber of Commerce Chief Executive Officer Daniel Tuhanuku suggested that in order to assist low income earners they would advocate the use of non inflationary policies, such as revising the taxable income threshold to benefit those on low incomes or to lower taxes on essential goods and services. This may help to counter certain knock-on effects of a minimum wage increase. Mr Tuhanuku added that they will be undertaking a study of the effects of an increased minimum wage on the economy as well as looking at alternative ways to help low income households.

The findings will be presented to the Government during the next round of consultations due to be held later this month.

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