An increase in the minimum wage could force some businesses to close and reduce working hours for employees.

This is a situation the Vanuatu Chamber of Commerce and Industry (VCCI) says it does not want to see happen.

Speaking to VBTC News, VCCI President Antoine Boudier said that raising the minimum wage could negatively impact businesses.

“We need to understand that when we increase the minimum wage, the impact is not only immediate. It also affects severance pay because severance is calculated based on the last salary. If you have someone who has worked for you for many years, the cost will significantly increase from the start. There will be many discussions, but we must understand that it is not only big businesses that will be affected , it will mostly impact small and medium enterprises,” Mr. Boudier explained.

He added that more consideration is needed, especially since Vanuatu imports most of its goods from overseas.

“Minimum wage increases, together with other associated costs, could lead to significant inflation. People in Vanuatu need to understand that we are not a producing nation , our economy is largely based on quotations and services,” he said.

Meanwhile, Pikinini Bar owner Milroy Cainton shared a different perspective. He said food prices in stores have increased, and it is only fair for the minimum wage to be raised.

He emphasized that employees are the backbone of any growing business.

“As an employer, expectations for employees always increase , they never decrease. But we cannot expect workers to slave away. They also need to enjoy life, just like business owners. When I first started, I paid the standard minimum wage, but as a Ni-Vanuatu, I feel for my people. These workers open at 6am, working in a small 4-by-4 metre space, locked in for eight hours, dedicating themselves to customer service and serving the public,” Mr. Cainton said.

After the issue surfaced on Facebook, many people commented that they would like to see the current minimum wage of 300 vatu increased.