By RICARDO WELLS
Tribune Staff Reporter
THE new national minimum wage of $210 could have a dire affect on one of the country’s leading hotels, as there is some suggestion that the 40 per cent wage hike might result in job reductions.
Speaking exclusively to The Tribune, a Paradise Island source said there are “growing rumblings” at the Atlantis resort that the government’s recently implemented minimum wage increase for the private sector is not being “favourably received” due to its affect on the company’s profitability and capacity to compete.
That well-placed source said that the increase in the minimum wage could cost the company as much as $2m a year – in addition to the $8m increase in business license fees presently experienced by the resort.
The source said “adjustments” would have to be made at the hotel. When asked if this included potential job losses, the source said it is a possibility.
“You can be assured that we will not continue to bear these costs. We will make adjustments where we have to,” the source, who did not want to be identified, stated.
“There was no conciliation with respect to the minimum wage increase. You would think that tipped positions would have been excluded from this newest tax on businesses.
“How does someone making $40,000 a year fall into the minimum wage employee category when there are mandatory gratuities attached?”
The source explained that while the resort can pass expenses related to value added tax (VAT) to customers, it was in no position to do so with every other cost thrown at it and stay competitive.
“This is just crazy mathematics,” the source said. “We will take whatever measures are necessary to sustain our business, however painful those measures may be.”
The new national minimum wage took effect on Saturday.
The increase brought private sector minimum wage in line with the minimum wage of the public sector, which is $210.
Earlier this month, Labour Minister Shane Gibson cautioned “unscrupulous” employers not to undermine the new wage rate.
At the time, he also dismissed claims that the wage increase would lead to higher levels of unemployment, suggesting that increases in the minimum wages across the region and North America have had a positive affect on economic growth.
Atlantis currently employees some 7,000 persons.