The Central Bank of Solomon Islands has joined in on the debate on minimum wage after government made its intentions known that it would seriously consider increasing the minimum wage.
The government, through various sources, has indicated that it may increase the minimum wage from the current one dollar-fifty cents per hour to seven dollars-twenty eight cents per hour.The Central Bank, however, has called for a more cautious approach suggesting that the new minimum wage should be implemented in two installments. The Central Bank says that it would be prudent, given the current economic conditions, for the government to first increase the minimum wage to two-dollars-twenty five cents per hour and later raise it to three dollars-twenty seven cents per hour.
Central Bank, in a statement, says that once the business sector makes the necessary adjustments, to cater for the rise, then the government can introduce the second phase to fully meet the desired minimum wage.
The Central Bank warns that any wage increase should not be used in an attempt to artificially raise general income levels. The Bank says that, instead, it should focus on improving the welfare of workers who are struggling to survive on the very lowest incomes.
It says a very high minimum wage level will be counter-productive in that it may, as studies have shown, result in job losses, huge inflationary effects, which will lower the incomes for the majority of the population.