The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A well-known retail entrepreneur has called for the minimum wage to be increased by 75 per cent to $7 per hour despite acknowledging that such a rise would “be challenging for me”.

Andrew Wilson, the Quality Business Centre (QBC) and Radioshack owner, told Tribune Business that such a rise was necessary for the lowest earners to have “a liveable wage”, acknowledging that it would be $1 per hour higher than the ‘minimum salary’ in his businesses.

And Mr Wilson, who is also the Democratic National Alliance’s (DNA) chairman, conceded that such a minimum wage increase would likely cause an “adjustment” in employment levels in his and other businesses it impacted.

Detailing a series of cost-saving measures he has taken to ensure his remaining retail businesses survive in an economy that remains depressed, Mr Wilson disclosed that total staff numbers across his formats have been cut from around 160 pre-recession to 30-plus today.

Backing the Government’s plan to increase the minimum wage from its current $4 per hour level, Mr Wilson told Tribune Business: “The minimum wage, as it exists now, at $150 per week, can pay for someone’s transport to work and lunch, but cannot sustain anyone.

“I do think it’s necessary for the minimum wage to be increased to a minimum of $7 per hour, so that our people can have a liveable wage.”

The proposed minimum wage increase has sparked mixed reaction in the private sector. Rupert Roberts, Super Value’s owner, said he would be in favour of raising the weekly rate by 33 per cent to $200, and would adjust salaries at the lower end of the supermarket chain’s pay scale accordingly.

Others, such as Phil Lightbourne at Phil’s Food Services, have also backed a minimum wage increase. However, Robert Myers, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman, expressed concern that such a rise would spark pressure for similar salary increases throughout the economy - especially in union-dominated sectors.

Emphasising that the BCCEC’s concern was the economic context/background against which a minimum wage increase would occur, Mr Myers also called for such a move to be backed by empirical data and studies.

A minimum wage increase would effectively raise the marginal costs of employing/hiring workers in sectors such as hotels and restaurants (where many staff are gratuity-reliant), construction, retail and gas stations. As a result, to compensate many such businesses might reduce their workforces to avoid the increased costs.

Mr Wilson conceded as much, telling Tribune Business of his proposal: “I know that’s [$7 per hour] going to be challenging for me. I know that adjustment would have to be made. Maybe whereas I have nine workers now, I might have to make do with seven to eight.

“I have, for many years, had a minimum wage in my businesses of $6 per hour. I think $7 per hour is what is needed.”

Suggesting that an increased minimum wage might also help boost consumer spending, he added: ‘When you consider that over 70 per cent of the local economy is consumer driven, how is the economy going to survive off $4 per hour.

“There are so many components to the cost of living that are not adjustable. I cannot adjust the cost of coming to work, I cannot adjust the cost of bread.”

The DNA chairman implied that a minimum wage increase was also essential given the likely reduced living standards set to result from the imposition of a 7.5 per cent Value-Added Tax (VAT).

“Quite honestly, conceptually, VAT and devaluation of the Bahamian dollar are one and the same,” he said, “in that out of $100, it now becomes $92.50 after VAT.”

Mr Wilson, who took over John S George when it was likely beyond saving, and with the world on the brink of recession, explained how he now manages to keep QBC, Radioshack and his fashion retail formats in business.

“We have moved to a position where we turn on the A/C two hours or one hour after opening, and shut if off an hour before closing,” he told Tribune Business. “We have structured our hours so that we can operate a single shift instead of a shift-and-a-half or two different shifts.

“We are staggering hours. In quite a few weeks, we have a person working 32 hours instead of 40 hours. We’ve made the hard decisions. We’ve adjusted. We’ve adjusted to survive.”

Mr Wilson added: “At one time I had 160 employees, and today I suspect I have about 30-plus. There comes a time when you have to choose: Is it to be 160-170, or zero?

“I’m still in business. I still have quite a few retail stores and other businesses, but it’s not as it was pre-recession.”

The QBC entrepreneur added that with ever-increasing tax and other cost pressures set to be imposed on the private sector in the short-term, many business owners were either seeking an exit route or eyeing a move into the informal economy.

“I can say for a fact that most businesses in this country are struggling and making the necessary adjustment to ensure their necessary survival,” Mr Wilson said. “I speak to many people who say it’s not worth the bother, and they’re calling it a day.

“I expect a large number of entrepreneurs to move into the informal economy and under the radar, as they see that as the way to survive.”

And he further told Tribune Business: “I suspect a lot of business persons, certainly those in my age category, most certainly will be questioning the viability of staying active in the long-term.

“Business has been challenging in the best of times, although we were able to make a profit. But, in the aftermath of the recession, there’s been a major adjustment to the business landscape.

“It calls one to question the feasibility of continuing, especially in the absence of light at the end of the tunnel. Recovery soon is wishful thinking. We have to assume it’s going to be a couple of years before we see, or hope to see, any type of turnaround in this situation.”