State Owned Enterprises (SOEs) express the minimum wage policy should not cause inflation.
Speaking at the Minimum Wage Committee at the parliament, officials from SOEs raised concerns that the policy might cause inflation. The executives of SOEs highlighted the minimum wage policy must be formulated in a manner which does not cause the price of goods and rentals to increase.
Managing Director of Waste Management Corporation (WAMCO) Adam Mohamed said the changes to price of staples earlier resulted in a price change in menus of cafe and restaurant. He said the minimum wage policy might also follow suit adding the public has no benefit from a salary increment should the market price of items change to 100 or 200 percent.
Meanwhile, CEO of Maldives Transport and Contracting Company (MTCC) Hassan Shah said the company spends a large share of the company revenues on staff salaries. Shah said while most staff it currently employs are unskilled and poorly educated, the company expenses would inflate even more with the introduction of minimum wage. He suggested the company has to reduce staff and ensure efficiently to tackle the challenges. He also promised to offer opportunities to locals more as the company intends to be more efficient.
Upon asking whether the introduction of minimum wage would reduce the expatriate workers, CEO of Maldives Ports Limited Shahid Ali said the policy will not offer a permanent solution to the issue. Shahid said the economy requires foreign labours as various sectors continue to develop, requiring more workers.
Furthermore, Managing Director of State Electric Company Limited (STELCO) Abdul Mughunee also expressed a similar rhetoric to most companies highlighting the introduction of the minimum wage bill would require them to spend more on wages. Mughunee said the policy must be formulated considering the impact of a minimum wage bill on the economy, as the government spends millions on subsidies even now.
The minimum wage committee is now meeting with stakeholders to identify concerns of authorities and impacts of a minimum wage policy as work of formulating a minimum wage bill is underway. Establishing a minimum wage is an important pledge of the administration.