5. Changes in exchange rates

In almost half of the countries and areas listed in table 2, exchange rates deteriorated against the US dollar between January 1995 and January 1996. In most of these, the deterioration was less than 15 per cent. Only in Romania and Turkey did it exceed 40 per cent. In five countries, there was no change, as the currency used was either the US dollar or a fixed rate of exchange. In the other countries and areas, exchange rates improved against the US dollar by up to 9 per cent. The combined effect of changing exchange rates and prices on the 1996 purchasing power equivalent of the US$385 of 1995 in each country depends on the magnitude of these factors. Where the deterioration in the exchange rate exceeds inflation, fewer 1996 US dollars are need to maintain the 1995 level of purchasing power. This happened in only three countries: India, Japan and Romania. In 24 others countries and areas, inflation exceeded the deterioration in the exchange rate, so that a larger number of 1996 US dollars are needed to reach the same (1995) purchasing power.

In addition, improvements in the exchange rate against the US dollar accentuate the effect of price increases, as was the experience in 18 of the countries and areas.

6. Purchasing power of the United States dollar in various countries and areas from January 1995 to January 1996

An example of the application of the formula is set out below, using data for Norway:

		$385	x	6.6172 (kroner/US$)	x	101.17 ______ 100
Number of 1996 US$ needed	=	__________________________________________					=	$401.92
				6.4127 (kroner/US$)

7. Proposed revised minimum wage

Proposed revised minimum wage:

Number of January 1996 US dollars with same purchasing power as US$385 on 1 January 1995:	408.23
Percentage increase over 1995:	6.0%

Table 3. Countries and areas arranged in ascending order of purchasing power, with corresponding weights

Country or area	Number of January 1996 US$ with same purchasing power as US$385 in January 1996	Weights
Romania	323.49	2
Japan	359.88	2
India	370.40	2
United Kingdom	385.63	2
Isle of Man (UK)	386.48	1
Taiwan, China	388.50	1
Panama	390.05	1
Bahamas	394.63	1
Bermuda (UK)	394.63	1
United States	395.50	2
Australia	395.78	1
Cyprus	396.60	1
Kuwait	397.96	1
Singapore	398.96	1
Malaysia	399.30	2
Canada	399.99	2
Norway	401.92	2
Germany	402.02	2
Indonesia	404.05	2
Netherlands	404.22	1
St. Vincent and the Grenadines	405.48	1
Brazil	406.26	1
Hong Kong (UK)	407.89	1
Croatia	408.15	2
Greece	408.23	2
Korea, Rep. of	408.34	2
Malta	409.11	1
France	410.10	1
Philippines	411.19	2
Denmark	411.28	2
Liberia	415.80	1
Italy	420.42	2
Spain	422.48	2
China	425.76	2
Sweden	428.56	1
Honduras	429.53	2
Viet Nam	436.34	2
Myanmar	440.41	2
Turkey	445.01	2
Ghana	455.48	2
Poland	459.08	2
Latvia	477.29	2
Iran, Islamic Rep. of	575.44	1
Russian Federation	669.59	2
Ukraine	767.56	2

Annex I Relevant provisions of the Wages, Hours of Work and Manning (Sea) Recommendation, 1958 (No. 109)

2. The basic pay or wages for a calendar month of service of an able seaman employed in a vessel to which this Recommendation applies should not be less than the equivalent of twenty-five pounds in currency of the United Kingdom of Great Britain and Northern Ireland or seventy dollars in currency of the United States of America, whichever of these amounts may from time to time be the greater: Provided that, in determining the minimum pay or wages in the case of ships in which are employed such groups of ratings as necessitate the employment of larger groups of ratings than would otherwise be employed, and having regard to the principle of equal pay for equal work, special factors may be taken into account, such as the extra numbers employed and any differences in crew costs incurred by the shipowner consequent upon the employment of such ratings.

3. Except where effect is given to the preceding Paragraph by collective agreement between bona fide organisations representing shipowners and seafarers, each Member should --

(a) ensure, by way of a system of supervision and sanctions, that remuneration is paid at not less than the rate required by the preceding Paragraph; and

(b) ensure that any person who has been paid at a rate less than that required by the preceding Paragraph is enabled to recover, by an inexpensive and expeditious judicial or other procedure, the amount by which he has been underpaid.

Annex II Resolution concerning the ILO minimum wage for able seamen

Having met in Geneva, in its Twenty-Sixth Session, from 17 to 25 October 1991,

Considering the report prepared by the International Labour Office on Wages, Hours of Work and Manning (Sea) Recommendation, 1958 (No. 109),

Considering also that criticism has been expressed on several previous occasions by the seafarers and by the shipowners as to the formula which has been used to revise the minimum wage figure contained in Recommendation No. 109,

Noting also that currency fluctuations have again rendered use of the current formula an even more unreliable exercise,

Considers that the formula used to revise the minimum wage should be amended,

Requests therefore the Governing Body of the International Labour Office to take action on the following proposals agreed by the Shipowner and Seafarer members of the Joint Maritime Commission, with regard to a revised formula for dealing with the updating of the minimum wage for able seamen:

Revised formula

(a) to provide a more representative list of 44 countries and areas including nations which have at least 2 million gross tons of shipping or countries and areas which are major suppliers of seafarers. The new list of countries and areas is:

(b) to minimize the short-term effect of drastic fluctuations in currency exchange rates. The formula is to utilize an averaging of the three latest months of US dollar equivalent exchange rates (e.g. for the 26th Session, March-May 1991 averaging);

(c) the formula is to measure the changes in consumer prices for a four-year period up to the month of the most current data (e.g. for the 26th Session, where available, May 1987 shall be the base month and May 1991 shall be the period of measurement). In the future, the period of measurement shall equal the full period of time between adjustments;

(d) the formula is to include a weighting on the basis of the total number of seafarers in different countries, on a scale equal to one for countries with less than 10,000 seafarers, and two for countries with 10,000 or more seafarers, the numbers to be determined by an ILO survey;

(e) the issue of productivity should be addressed when the Joint Maritime Commission or the bipartite wage committee meets and, if by common reasoning the two parties have found productivity increases have taken place since the last adjustment was made, a relevant percentage should be agreed upon and added to the new wage figure calculated according to the formula.

Periodic review

Updating of minimum wage figures