Private Sector: Compensation Cost that Paid to Employers

The quantum of salary compensation to be granted to employees in the country from January 2014 will probably be known today, Monday, September 23, when a technical committee chaired by Xavier-Luc Duval. As in previous years, the rate of wage compensation will be indexed to the estimated 3.7% at the end of December 2013 the inflation rate. One method that denies employers relying on the fact that the inflation rate can not be the only criterion for calculating the quantum of compensation.

"You can not link the compensation solely on the basis of the level of inflation. There are other factors to consider to better understand the economic realities in which businesses are required to operate today, " says Pradeep Dursun, Acting Director of the Mauritius Employers' Federation(MEF). An assumption that is far from unanimous in trade union federations. They argue that workers deserve better than replacement rates based on an inflation rate of 3.7%. Companies insist unionists have the financial means to pay more.

Pradeep Dursun contends that the MEF is not against the principle of wage compensation. However, it must be fair and reasonable, he said, so as not to undermine the financial vulnerability of local businesses. "He should know that the payroll in the private sector is in the range of Rs 7.2 billion per year and a percent increase amounts to Rs 700 million for this sector. " In addition, the MEF observed that the performance of the main economic sectors remained modest to say the least. Apart from the textile and tourism, which will show better performance rate in 2013, other economic sectors, including information technology and communication (ICT) and the financial services sector will not experience a strong recovery. While the construction sector continues to decay phase, with less than 7% this year. However, this gloomy picture painted by the MEF is far from convincing some economic observers. Financial services, they say, will show a growth rate of 5.5%. Including banks making billions of rupees of profit.

"The banks have huge financial means to pay much more than the legal minimum proposed by the government," they say. Of course, beyond the performance sawtooth these economic sectors, there has to preserve employment. Job creation has been weak in recent years to absorb new entrants into the labor market. With the number of unemployed from 48,300 last year to 49,800 in 2013, of which 50% are young people between 16 and 24 years. What does that tell Pradeep Dursun the employers' federation is responsible concentrate on the many young people who are desperately looking for a job.

Another factor is a source of concern for traders is the low productivity of the Mauritian industry. While payrolls increased by 4.7% in 2012 and that the monthly income of large companies rose to 5.4% last year (Rs 21,041 in 2012 against Rs 19,967 in 2011), this has not was translated by an increase in productivity. Instead, says Pradeep Dursun, the unit cost of production increased by 3.1%, reducing the cost of the country's competitiveness. Between union demands and caution advocated by traders against the quantum of salary compensation, it will be the government to play the referee.