Surviving on the barest minimum

Surviving on the barest minimum

By Patrick Matbob

Samson Wans used to go to school at Baitabag Primary School about 15 kilometres north of Madang. He quit school this year because education has become a luxury for him. His father’s K30 per fortnight wage, as a labourer at Milinat plantation, could not support him and his brother at school. The school fee was K50 for each of them.

“My father could not pay our school fees or even buy our books and pens. He needed the money for things like kerosene, rice, soap and clothes,” said Samson. He was collecting coconuts with his brother to sell for some much-needed cash. There are thousands of Papua New Guineans like Samson who are affected by the minimum wage rate being paid in the country.

Last year the Minimum Wages Board awarded an increase on PNG’s minimum wage from K45 a fortnight to K120 a fortnight. The award, which was gazetted, met stiff opposition from the powerful PNG Employers Federation and the Rural Industries Council who claimed that they could not afford the increase. They said 15,000 to 20,000 jobs would be lost as a result. The employers influential lobby has forced the Government to defer the award while trying to negotiate a lesser rate of K30 a week. So far no agreement has been reached.

The minimum wages was adjusted following the devaluation of the kina and the increased cost of living. The Consumer Price Index (CPI) increase in PNG is estimated at about 100 per cent since 1992 when the minimum wage was last adjusted. This means that since 1992 the prices of most of the goods bought by consumers have doubled.

For Samson’s father and other minimum wage earners in rural areas, the figures mean nothing. The increase in cost of living has hit them hard and K45 can buy very little. A bag of 20-kilogram rice costs nearly K40 and little is left for tinned food, kerosene, soap and PMV fares for two weeks. This is not even considering other costs such as clothing, health and education.

The managers of the companies that pay the minimum wage rate are aware of its inadequacies, yet are wary of the new increase.

Acting Manager of Madang Rural Products (MRP), a poultry company, Sam Gigimat, said his company was struggling at the moment and could not afford to pay the new rate of K120 a fortnight.

“We’ll go under,” he said shaking his head.

MRP pays at a varying rate, depending on sales, starting at a minimum of K45 up to K70 a fortnight when sales are good. This method of payment is allowed under the 1992 wage determination. However, Mr Gigimat is also aware of the needs of his 40 workers at their company site near Yagaum about 10 kilometres from Madang town.

“Each year we give out school fee loans to our workers to help them out.”

 The highest amount paid out is K500 and workers repay the loan through deductions from their pay. No interest is charged. Mr.Gigimat said about K3000 is paid out in school fee loans each year.

Madang Rural Products is a self-help venture set up by the major churches and Madang Government to help the local people and therefore, has a policy to return some of its profit to the people.

Peter Muriki is General Manager of Madang Development Corporation, the business arm of the Madang Provincial Government that owns Siar Plantation. Mr Muriki said they paid their labourers K60 a fortnight, which was about K15 higher than the minimum rate. K60 per fortnight is also the government’s new suggested minimum rate currently being negotiated. Yet, Mr Muriki said, this was inadequate to meet the needs of his workers.

“One worker had two kids in school and wanted a loan of K600 for school fees.

“How can you give them such a loan?”

He said the worker even offered his full pay packet for next 10 fortnights to pay back the loan.

“But I could not do that to him.”

Mr Muriki said he helped them to create other ways to earn money like allowing them to sell coconuts.

“The minimum wage rate is not feasible for a family. It’s a bit inhuman,” he said.

The Employers Federation and Rural Industries Council are made up of wealthy companies and plantation owners who are organised and influential. The minimum wage earners, on the other hand, are totally disadvantaged with no union representation and little government support to look after their interest. The PNG Trade Union Congress, which has been fighting hard for the minimum wage earners, has membership mostly from the higher paid urban workers.

General Secretary of the Trade Union Congress John Paska said: “The K45 minimum rate was at best redundant and at worse legitimising slavery.”

Mr Paska said the PNG Employers Federation and other employer groups have admitted that they pay well above the minimum wage rate of K45. He asked why should the minimum wage of K45 be retained?

Mr Paska was also critical of the Rural Industries Council, which is made up of plantation and farm owners. He accused them of living a lavish lifestyle while their workers were suffering.

“As for the Rural Industries Council, what we know is that management of plantations enjoy a lifestyle that would make urbanites embarrassed.”

Meanwhile, Mike Manning from the Institute of National Affairs is in support of the 1992 Minimum Wage Determination law that all workers should be paid according to the ability of each company to pay. In other words, if a company’s profits increased, the workers should be given a share of that increase.

“This has been the law since 1992 and if any workers are not receiving those increases they should blame their unions and themselves for not demanding their legal rights,” Mr Manning said.

However, this law puts the minimum wage earners at the mercy of employers and policing the law from abuse can be difficult.

“In order to make sure that this law is followed and that all workers are being paid a fair wage the Government should give every assistance to the workers and unions to find out what is a fair wage for each firm,” Mr Manning said.

Companies such as Madang Rural Products and Ululan Plantation in Madang have been following this practice.

The Catholic Mission owned Ululan Plantation paid the minimum K45 per fortnight to its 60 workers and when cocoa prices were good, increased payments to K60 or K70 a fortnight.

Former manager, Mr Paias Bokorum said if wages were raised to K120 a fortnight, he would have definitely closed down the plantation.

“Copra prices were very low. We were not earning anything from copra,” he said.

However, he was also aware of the plight of his 60 workers.

“Their fortnight wages only allowed them a 20kg bag of rice. That’s it. They were basically living on their gardens.”

Mr Bokorum said he helped his workers set up their own canteens to supplement their income. Mr Bokorum highlighted another problem. He said there is a general misconception that because plantations are in rural areas, all labourers can make gardens to supplement their meager income. However, that is not true.

Mr Bokorum said his plantation workers did not own land around the plantation but were allowed to make gardens temporarily by the landowners. However, now the landowners want their land back.

“I can see real problems coming soon,” Mr Bokorum said.

Madang Development Corporation’s General Manager Mr Peter Muriki said if employers want to keep the minimum wages down then they must provide their workers alternatives to earn additional income.

“They (employers) have to encourage self-help projects such as poultry, piggery, fishing or even mix farming,” Mr Muriki said.

He said employers must provide the resources for workers to set up and operate these projects.

While the minimum wage debate was on, the politicians in Port Moresby approved themselves a hefty 100 per cent salary increase much to the disbelief of the rest of the nation. An embarrassed Prime Minister Sir Mekere, who only days earlier had rejected the new minimum wage increase of K120 per fortnight, was going to get more than K6, 000 a fortnight. He has temporarily halted the MPs pay rise and sought a review.

The Employers Federation and the Rural Industries Council argue that by keeping wages low, more people can be employed and the money can help them with costs like school fees. However, that has not been the case for Samson Wans and his brother. Their father’s minimum wage and the high cost of education has put them out of school early to join the thousands of other PNG’s unemployed youths.