Fiji Hotel and Tourism Association,03 April 2025 – The national minimum wage in Fiji officially increased to $5.00 per hour earlier this week, as of Tuesday, April 1, 2025.
While this might not have caused any noticeable changes for many in the tourism sector, we recognise that this increase marks a 54% rise in the national minimum wage over the past three years, which will undoubtedly impact many small and medium enterprises
Long before this policy shift, tourism has often led the way in fair pay and competitive wages that ensure that employees are adequately compensated for their work, boosting morale, productivity, and overall job satisfaction.
This helps attract and retain skilled workers, reduces turnover rates, and promotes economic stability and brand loyalty. Additionally, it is widely recognised that equitable wages foster a more sustainable and motivated workforce – all key elements of remaining competitive while delivering a superior product or service.
The government’s decision to raise the minimum wage was explained as being driven by the rising cost of living and the need to ensure that workers across all sectors can afford basic necessities.
But minimum wages in Fiji have often been used as a political tool, with governments leveraging wage adjustments to appeal to voters or address social inequalities. The recent increases in the minimum wages have been framed as part of broader commitments to fair wages and economic equity. However, these changes can also spark debates about their impact on businesses, particularly SMEs, which may struggle to absorb higher labour costs.
But increasing costs of living are a global phenomenon that is not limited to developing countries like ours. These are being driven by several global factors, including inflation and economic policies in countries experiencing high inflation due to supply chain disruptions, increased demand post-pandemic, and monetary policies.
The war in Ukraine has also significantly impacted global energy and food prices, leading to higher costs for essential goods, while rising property values, rental rates, and healthcare expenses are making it harder for people to afford basic housing and healthcare necessities.
Then there are the climate and supply chain disruptions caused by extreme weather events and the impacts of geopolitical tensions that disrupt supplies, making goods more expensive.
In the meantime, while costs are rising, wages in many sectors have not been able to keep pace, thereby reducing purchasing power.
The effects of these factors might vary by region, but they collectively contribute to the financial strain many people are experiencing.
For Fiji, all of the above are applicable and relatable. Our impacts are further exacerbated by frequent weather-related emergencies and limited natural resources that can rebalance our lower exports with heavily reliant imports.
There are no magic bullets, despite what the politicians and politicians-in-waiting are telling us. If we remove or reduce VAT, we effectively reduce the government’s critical access to perhaps the only revenue stream that is paid by every single person purchasing a service or product. And doing so would only erode our ability to complete planned, large infrastructure projects, or extend their completion timeframes into the next 2 decades.
Large infrastructure projects that We The People have been demanding – effective water supplies, reliable and cleaner energy, safer and durable roads systems, a health system we can be proud of, bridges that will last into the next century, protective sea walls, access to more affordable housing options, efficient airports and sea ports, and innovative educational programs that will take our children into the future.
If we increase taxes, we gain very little more than what we are already squeezing out of our working population, given that we have not been able to grow the small 30% that currently pay taxes, only 20% of whom pay the lion’s share of taxes.
And we certainly cannot reduce our social responsibilities – free bus fares, back to school funding, free education, poverty alleviation funding, social pensions, free water and power to lower income households and many more of our social responsibilities that now include taking care of recovering drug addicts – because this group tends to grow rather than reduce, which should be telling anyone interested, that our social safety nets are outdated, failing or not fit for purpose.
So as wages make its latest increase and we prepare to hear the next contingent of aspiring political leaders regale us with ways they will keep increasing wages while conveniently forgetting that there is no way to “catch up” with increasing food and living costs; consider the missing link in all the rhetoric carrying on around us that some countries have tapped into and are seeing the incredible dividends for.
Working harder, smarter or more productively is not something we actively seek to inculcate into our policies, workplace ethics or public sector action plans. It is discussed, explained, trained, and even celebrated with an annual gala event, but we doubt any of the productivity awardees can explain how they have improved a particular service or product that is now saving time, energy and money for that business or public sector agency.
But we would be happy to be proved wrong.
Our minimum wages have now been increased, but we have yet to hear any related expectations on how this might now drive or improve productivity. Instead, the increasing of minimum wages is seen as a way to address inflation and the increasing cost of living, while work processes and outputs will probably remain the same.
In most countries and organisations, higher wages along with a range of benefits and professional development opportunities is used to attract and retain the best talent, who in turn will use their skills to deliver exceptional service and strive for higher productivity.
For those businesses that have yet to align with the new wage policies, now is the time to step up, while also considering that you could drive higher productivity and therefore deliver a more superior product or service over your competitor by further reviewing your wage structure and benefits package.
Higher productivity can deliver higher outputs that then make the increased wages worthwhile. Or do nothing differently and expect the same outputs.
Beyond simply meeting the legal requirement, consider what more can be done to build a loyal, motivated and productive workforce.
Let’s not just settle for the bare minimum—let’s strive for a future where every worker in our organisation is paid fairly, valued, and given the opportunity to thrive. The benefits spillover from your business into your industry and flow into OUR economy.
Everyone benefits.
Fantasha Lockington – CEO, FHTA (Published in the Fiji Times on 03 April 2025)
Fiji Hotel and Tourism Association
The Voice of the Industry
