Business ‘Support’ For Minimum Wage Rise


Tribune Business Editor


Private sector support for increasing the minimum wage is growing, a leading executive says, although it wants a free labour market to still “rein” in the Bahamas.

Edison Sumner, the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) chief executive, told Tribune Business that a minimum wage increase was among the “priority” issues being discussed between government, trade unions and the private sector.

Based on business community feedback, Mr Sumner said there was “support” for raising a minimum wage that had not been increased since it was implemented in 2001, some 14 years ago.

He indicated, though, that such backing was conditional on several things, with worker productivity and associated employee ‘benefits’ needing to be incorporated into the minimum wage debate.

And Mr Sumner also confirmed that he and Peter Goudie, as the private sector’s representatives, were discussing redundancy pay and associated employer responsibilities with the unions and government on the newly-formed Tripartite Council.

Mr Sumner acknowledged that the minimum wage was “back on the table” as an issue, after a week in which it had been raised by both politicians and trade unions.

Obie Ferguson, Trades Union Congress (TUC) president, reiterated his call for an increase in the private sector minimum wage to $300-$350 per week. That would represent a 100-133 per cent rise over the current $4 per hour/$150 per week that is currently in place.

Similar sentiments were expressed by minister of foreign affairs and immigration, Fred Mitchell, in relation to the $210 per week public sector minimum wage. Both he and Mr Ferguson argued that neither minimum wage was ‘liveable’ given spiralling cost of living increases, which have been exacerbated by Value-Added Tax’s (VAT) implementation.

Mr Sumner, though, referred to a July 2014 report by the International Labour Organisation (ILO), which found that the Bahamas’ $4 per hour private sector minimum wage was already higher than regional counterparts.

“We’re finding that even though our minimum wage seems to be low by our standards, it is certainly much higher than many of our counterparts in the region,” he told Tribune Business.

Robert Myers, the BCCEC’s former chairman, last year warned that increasing the minimum wage could further undermine the Bahamas’ competitiveness. He added that at least 90 per cent of Bahamian businesses were paying all staff above $4 per hour.

The economic theory is that, if the minimum wage is increased, employers may compensate for the increased costs by reducing staff numbers, thereby increasing the unemployment level.

And an increase might also make businesses more reluctant to employ young workers, thus preventing school leavers with minimal academic qualifications from entering the workforce.

A minimum wage rise would also heap another cost increase on top of successive rises experienced by businesses, but Mr Sumner said that based on feedback from the island Chambers and others “so far there is support for increasing the minimum wage as it is currently”.

However, he added that the private sector was also insisting that “a free market has to rein” when it came to determining employee salaries.

“We want to offer employees what their work is worth,” Mr Sumner said, “and the minimum wage is not for paying someone to show up to work but is a reflection of their productivity. Companies must have the ability to maintain certain levels of pay based on productivity.

“We don’t want to see any employee exploited for the work they do, and that they have a decent take home pay.”

Mr Sumner called for further poverty studies to determine a ‘take home pay’ level that would ensure workers could provide for their family’s needs.

“Persons should be paid for what they have contributed to the company,” he reiterated. “It should be a decent day’s pay for a decent day’s work.”

The BCCEC chief executive added that any minimum wage assessment had to “go beyond” basic salaries, given that many employers also gave staff access to pension schemes and private medical insurance.

And he also revealed that the Tripartite Council was reviewing redundancy pay as it related to the Industrial Relations Act and Employment Act.

“The minimum wage is certainly at the top of the discussions we’re having right now,” Mr Sumner said, “with a view to making recommendations to amend the law with respect to that and redundancy pay, and the responsibilities of employers when it comes to redundancy.

“We expect the Cabinet to make amendments to the legislation in very short order.”


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