Businesses will try to absorb the additional cost of doing business after the national minimum wage rate going up to $5 an hour, however if employee productivity and sales do not increase, the cost of goods will go up.
This has been highlighted by Suva Retailers Association President Jitesh Patel in an interview with fijivillage News, where he says it will be a wait-and-see situation.
He says if employee productivity increases when they come to work every day and show commitment, and if businesses can sustain the extra cost through increased sales, then they will always try to maintain prices.
Patel says as the minimum wage and civil servants' pay rise, they hope consumer spending will increase too, which will stimulate the economy.
He says if this happens and the flow-on effects are evident, most retailers and businesses would try to reduce the current cost of goods sold.
The Association President further says that investment in the country is increasing because interest rates for lending is still low.
He adds that the continuity of policies and incentives for hotel investment should give confidence to investors as well.
Patel says they are looking forward to seeing more investments in the construction sector, but ultimately, they need workers in those fields too.
He adds that investment will also increase if the Immigration Department allows more workers to be brought in, especially in the construction and manufacturing industries, where there are significant shortages.
Effective from 1st August 2024, the national minimum wage will be increased to $4.50 an hour with a further increase to $5.00 an hour effective from 1st April 2025.
