Claims that an increase in the national minimum wage would be “economic suicide” are nothing new, according to Chairman of the National Tripartite Council (NTC) Robert Farquharson, who yesterday said businesses made the cry three years ago when the current minimum wage was implemented, only for the opposite to happen.
Talk of an increase in the national minimum wage resurfaced after the Progressive Liberal Party (PLP) released its economic plan earlier this week, in which it promised it would recommend to the National Tripartite Council that it move towards a minimum wage of $250 per week in the private sector, if it won the upcoming general election.
“Similar views were given the last time we increased the minimum wage, that there would be economic suicide, it would ruin small businesses, it would cause a lot of businesses to go out of business, it would cause more unemployment. That was not the case. In 2015 when we originally studied a minimum wage increase in the United States, Trinidad, Jamaica and Guyana, the minimum wage increase actually had a positive impact on those economies. And so I’m not sure what the situation will be given the considerations this time, because each time you have to look at the overall economy of the country.”
Farquharson continued, “Persons who make the minimum wage are usually at the lower end of the economic scale. And to increase your take home from $150 to $210, by 40 percent, those same persons, those hundreds and thousands of workers would have then turned around and spent that money right back in the economy. So that additional 40 percent went right back into the mom-and-pop stores, into the food stores, back into the gas stations, back into the convenience stores. And that allowed economic activity to increase. When economic activity increases then unemployment will not be impacted negatively. That’s more money circulating in the economy.”
The national minimum wage was increased from $150 per week to $210 per week in August 2018.
Farquharson said the NTC had already started to review the minimum wage with a plan to make recommendations, however the COVID-19 pandemic caused a delay.
He said the process of increasing the minimum wage is very intricate and cannot be controlled by the political directorate.
“The concept of increasing the minimum wage is done through a systematic approach. The last time we submitted recommendations to the government to increase the minimum wage it was done after extensive research, extensive collaboration at a local, regional and international level,” the NTC chairman said.
“We studied significant statistics and data from both The Bahamas and the Caribbean and other parts of the world, we looked at the retail price index, we looked at the cost of living, we got views from the employers, from the workers, from Grand Bahama in the north and Inagua in the south. And then based on the data provided we made a recommendation to government that the minimum wage should increase and it was increased by 40 percent.”
The Bahamas has the highest minimum wage based on a 40-hour work week in the Caribbean region at $5.25 per hour, compared to Jamaica which is set at $1.41 per hour, Barbados at $3.13 per hour and Trinidad and Tobago at $2.58 per hour.
Still, Farquharson said The Bahamas’ minimum wage is low based on the cost of living in this nation.
“If you look at a family today, $210 is extremely difficult for a family to survive on. You have no argument from me on that. It’s extremely difficult for persons to survive off making $210, however, you also have to look at the small and medium-sized businesses; if you significantly increase the minimum wage that’s unbearable for them, consideration may have to be given to the possibility of cutting operating costs,” he said.
“So take into account that the cost of living in The Bahamas is extremely high. It is extremely difficult, but some people are doing it, they’re doing it through the help of God, of family and friends.”
Farquharson said during the last national minimum wage increase exercise the NTC made the recommendation to the government that the minimum wage should be tied to the cost of living, so that when the cost of living does go up in the country, the minimum wage goes up as well.
He said a recommendation was also made that the minimum wage be reviewed every two or three years to keep pace with the cost of living.
“Let’s not forget we have a workforce in The Bahamas of about 218,000 persons. About 55,000 to 60,000 of those persons are represented by trade unions, under which the collective trade unions bargain for those people. And very few if any of those 60,000 workers make the minimum wage. They make above the minimum wage because the trade union movement has been able to negotiate additional funds. So we look at those persons who are not in the collective bargaining arena and we make a determination of how many of those persons are involved,” Farquharson said.
“We look at those small mom and pop stores that have two to three employees. Are they able to afford $250? If they can, the people in the communities will also get that and more money in the store and therefore the employer will be able to afford the increase for the employees. And that’s how we have to look at it.”
The post Farquharson: National Tripartite Council already reviewing minimum wage appeared first on The Nassau Guardian.
source https://thenassauguardian.com/farquharson-national-tripartite-council-already-reviewing-minimum-wage/
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