ECONOMYNEXT – Sri Lanka’s Foreign Employment Ministry has sought permission from the cabinet of ministers to reverse a minimum wage which can workers, particularly less skilled ones, from getting jobs, a media report said.
The deadly minimum wage of 450 dollars for skilled workers and 350 dollars for unskilled workers was mandated by the budget.
The Sri Lanka Bureau of Foreign Employment has issued a circular to all licensed employment agencies not to provide jobs below the mandated basic minimum wage which does not include extra allowances such as overtime.
Sri Lanka’s The Sunday Times newspaper quoted Foreign Employment Ministry Secretary G S Withanage as saying that Minister Thalatha Athukorala had sought cabinet approval to suspend the minimum wage until skills of Sri Lankan workers are raised.
He said the budget decision has been taken without consulting the Foreign Employment Bureau.
Sri Lanka’s Association of Licensed Foreign Employment Agencies (ALFEA) had also protested the minimum wage.
"Our industry is already unstable due to the crisis in West Asia with plunging oil prices. As a major voice in the industry we were not asked for our opinions or proposals."
Sri Lanka has a history of making ad hoc policy overnight without white paper or any prior consultations, especially after gaining self-determination from Britain.
Policy which are not evidence-based but are made on the whims and fancies of special interest group can seriously undermined the freedom of the poor.
Numerous state interventions in recent budgets has cost the United National Party its reputation for making policy that expanded economic freedom and growth, economic analysts say.
The ad hoc interventions in budgets has also given an impetus or forced the Sri Lanka Freedom Party and President Maithripala Sirisena to take a direct hand in economic matters, they say.
However unlike in a dictatorship several damaging interventions have been abandoned.
The minimum wage is one of the most deadly state interventions that came to Asia from the West.
Western eugenicists originally devised the minimum wages to keep, blacks, the disabled and women out of the workplace and society, so that the most productive white workers were hired.
"Legal Minimum Wage positively increases the productivity of the nation’s industry by ensuring that the surplus of unemployed workmen shall be exclusively the least efficient workmen,” Fabian socialist Sydney Webb wrote in 1912.
"Or, to put it in another way, by ensuring that all situations shall be filled by the most efficient operatives who are available."
Under a minimum wage only the most skilled are hired and the less skilled can no longer bargain in the job market with a lower wage. Businesses that could have operated with a lower wage either go out of business or are not started while unemployment remains high.
Other analysts also warned that the ill though out minimum wage may force job agencies and workers to break the law and push them into a black economy where they operated outside the law and legal protections.
"Nobody would go to the Middle East and suffer for say 300 dollars if they could get a similar paying job in Sri Lanka," wrote EN’s economics columnist Bellwether.
"If job agencies are prevented from say recruiting people for 350 dollars, the danger is that people will go out falsifying data, or without registering for insurance or at embassies undermining their own safety. In fact, people will be encouraged to break the law." (Colombo/Feb18/2017)