Sir Franklyn: Minimum wage hike would impact some, benefit majority

The Progressive Liberal Party’s (PLP) plan to push an increase of the private sector minimum wage would no doubt adversely impact some people, but would benefit the majority of workers, businessman and developer Sir Franklyn Wilson said yesterday.

In its economic plan released earlier this week, the PLP stated that if it won the upcoming general election, it would recommend to the National Tripartite Council that it move towards a minimum wage of $250 per week in the private sector.

The announcement has garnered broad discussion and criticism across the business community, with some fearing their businesses would fail if they are required to pay more than the current $210 per week minimum wage.

Sir Franklyn said in some matters of the economy, the benefit to the majority would outweigh the minority and it’s up to the government to find ways to mitigate the impact on the minority.

“The nature of the Bahamian economy is such that… there are two things, its size and its also certain, specific industries. There is a category of businesses based on size and industry for whom that increase will not be a problem at all. There are some businesses that are small, there are some people who are domestic workers – forget businesses, a maid in someone’s house – that person may find it a struggle to pay that extra $40,” Sir Franklyn told Guardian Business.

“So, there’s no doubt that there are some people that it might be a struggle, but the summary point in my opinion is that you can’t find any economic policy that’s good for the majority that will not lead to some difficulties for the minority. So, this is a case where I am convinced that it will be helpful for the majority and you have to find some way to mitigate the minority who are adversely affected.”

The PLP has also proposed it would phase in a livable wage and also reduce value-added tax (VAT) to 10 percent across the board.

Minister of State for Finance Senator Kwasi Thompson on Tuesday blasted the opposition’s proposal, stating that it would result in a $100 million revenue shortfall if implemented.

He called the announcement an irresponsible political ploy.

From a business standpoint, Sir Franklyn disagreed.

“To me the idea of reducing VAT, I see where the government’s response to that is that it’s irresponsible, it’s reckless. I think on that particular point, as far as I know, the economics I learnt is that it’s not necessarily reckless, it could be a stimulative thing,” he said.

“[US President Donald] Trump did it when he went into office and I think most people would concede that Trump’s economic policies were at least beneficial to America in macroeconomic terms. So I don’t quite see why the idea of reducing VAT to stimulate the economy is not a good thing.”

Sir Franklyn said one thing he was happy to see during this highly political climate is that both the PLP and the Free National Movement agree on the need to bolster domestic investment.

“The future of the Bahamian economy is very bleak unless there is increased levels of domestic investment. So that’s a given. While it is wonderful that the parties seek to differentiate themselves in this area – it is wonderful – the prime minister would no doubt tout what he has done with the Small Business Development Centre with Davinia Blair,” he said.

“So I interpret this to say the PLP is saying whatever you call it, we will expand that, grow it. So if that’s the point it’s wonderful that the political parties are agreed on the importance of that and anything that either side does to do that is great for the country.”

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source https://thenassauguardian.com/sir-franklyn-minimum-wage-hike-would-impact-some-benefit-majority/