Wage inflation is expected to impact Fiji’s retail sector sales in the fourth quarter of this year. Starting August 1, the minimum wage will increase by 50 cents to $4.50 per hour.
A seven to ten percent increase for salary-based civil servants and 10 to 20 percent increments for other civil servant wage earners.
Dr. Kishti Sen believes these adjustments will directly increase consumer spending. For most people, the extra dollar earned translates into an additional dollar spent. However, there is no danger of a wage-price spiral risk.
Biman Prasad explains that wage increases may only sometimes lead to higher prices for goods and services, as businesses are also sensible.
Fiji’s low interest rates and strong fiscal policy framework also help control inflation. The theory that wage increases will lead to higher prices for goods and services is only sometimes valid, as businesses are also sensible.
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