The genesis and performance of an Australian wage-fixing system in Papua New Guinea

Abstract

The functioning of inherited institutions, including those regulating labour markets, in former colonised countries is embedded with their character and history. Yet, there has been surprisingly little academic interest in the changing roles and performance of post-colonial labour market institutions. These institutions can express values - linked to, for example, fairness in decision-making and equitable distribution - strongly held in the colonising country at the time of transplantation. Such values can then shape institutional experience in the colony and post-colonial society. This article examines the establishment and performance, over four decades, of an Australian-styled system for fixing minimum wages established in colonial-era Papua New Guinea (PNG) and centred on the PNG Minimum Wages Board (MWB). The article uses documentary evidence, in-depth interviews and the author's own experience as participant in the important 2000 round of MWB deliberations. In doing so, it highlights how the MWB's composition changed to more fully reflect indigenous circumstances. It also examines how earlier priorities of socio-economic equity amid development, via arguments base on needs, have come under fierce pressures from organised employers' arguments for prioritising capacity to pay at the firm and national level. This reshaped MWB's wage fixing within a largely deregulated bargaining system despite the much more difficult economic circumstances of the lowly paid in this struggling, developing nation.