Ministry of Economic Affairs, Fayyaz Ismail has said that setting a minimum wage is going to increase the state spending by MVR 3.8 billion.

He made the remark in response to a question from a member of the public at the opinion discussion session on minimum wage held last night.

The Economic Minister said that some research has been conducted on the effects on the economy by having a minimum wage. And so, the salary of state employees will increase by 1.5 billion.

Minister Fayyaz said that the government estimates “a hit” of 3.8 billion and have to consider an alternative to get that money.

He said that minimum wage will have both positive and negative impacts on the economy. Minister Fayyaz said that the amount that is decided as the minimum wage is not a good one, it will have a major impact on the economy and so they are working to set an amount that is good on both sides.

The Minister also note that a minimum wage would also impact employees negatively as employers would look to cut down expenses and some jobs that exists now would may become fewer.

Minister Fayyaz said that it is taking a long time to make a decision because it is something that is deeply connected to the people. And in reality, the decision requires a lot of research.