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LETTERS: Minimum wage vs. labour shortage

Tuesday 28 September 2021 | Written by Supplied | Published in Letters to the Editor, Opinion

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LETTERS: Minimum wage vs. labour shortage

Letters for Tuesday September 28, 2021

Dear Editor

I can understand the comments putting pressure on a higher Cook Islands minimum wage. However a few things concern me.

1. Cook Islands has one of the highest minimum wages amongst comparable countries i.e. Fiji and Samoa at NZ$1.50.

Unless the minimum wage was going to match NZ$20, then Cook Islanders will still leave, and be replaced with foreign workers.

2. Increasing minimum wages does not necessarily increase affordability. Most of the businesses that end up suffering are those that service locals. Increasing the minimum wage will require businesses to increase prices. Food, services, utilities and potentially tax would all increase. Effectively wage induced inflation.

3. As with other developing countries a lower labour cost allows for diversification. Developed countries will send work offshore to countries the have lower labour costs. This allows developing countries to increase employment and a diversified economy.

4. It’s not a unique issue for any country to have their young ones leave the nest to gain worldwide experience. The current issue is particularly for the tourism sector that is unable to access workers from Fiji and Philippines.

All of this doesn’t stop the struggle that Cook Islanders face. However it does make it clear that the minimum wage mechanism is a blunt tool trying to solve a complex problem. Interesting to see some innovative solutions however I can only think of a few.

a) Minimum wage increases be applied to Tourism Industry. As their price increases will hit foreigners not locals. However any tight labour market should force employers to do this without the government anyway.

b) Government incentives to encourage foreign investment into the Cook Islands. i.e. tax incentives, apprenticeship/training subsidies for businesses etc. This means that foreign businesses looking to upskill locals will get an incentive, and not only look at the wage cost.

c) The nuclear option would be to follow Samoa and become completely independent from NZ i.e. Cook Islanders no longer have NZ citizenship. Terrible for locals but makes the barrier for those leaving much harder.

Nick Ashford

(Facebook)

We lived in NZ for about five may be six years, worked hard saved heaps and then we decided to move back to Rarotonga when our kids were both younger to give them the best of life in a safe country.

Now they are 13 and 14 years and after the first (wave of) pandemic hit the island and our borders closed to the world, I was made redundant and hubby couldn’t run the family business due to being a tourist attraction.

Long story short, we took the opportunity to be able to provide for our kids and family back home by taking up a job here in NZ. We have been here since February without our kids working six days a week and sending home most of our funds for the kids, family and our bills. We were however on our way home and then the lockdown happened.

So regardless of what is said about us, good or bad, we had to leave in order to be able to financially provide for our kids and family so in the long run they all are able to continue living their best lives and as a parent I will do it all over again if I have to.

Sinsemillia Ngatono Raina

(Facebook)

Gender equality

In the Monday newspaper Cook Islands News offers pictures of the winners in Round Raro Race. In every instance the male victors have the largest pictures, front page and top of the sports page.

We preach equality between the genders in sport but most of the time it’s just preaching and not acting.

(Name and address supplied)