By NEIL HARTNELL
Tribune Business Editor
A National Tripartite Council member yesterday described the minister of labour’s assertion that it is debating a minimum wage increase as “unequivocally not true”.
Peter Goudie, one of the private sector’s representatives on the Council, told Tribune Business “there’s absolutely no discussion” of a rise because “the last thing we want to do right now is increase the cost of business.”
Instead, he revealed that the Council’s “number one priority” is the creation of a National Productivity Council and accompanying legislation designed to boost worker and corporate output throughout The Bahamas, with recommendations likely to be ready for presenting to the Government this October.
Mr Goudie’s assertion contradicts comments made by Dion Foulkes, minister of labour, who told assembled reporters outside Tuesday’s weekly Cabinet meeting that the National Tripartite Council was discussing a minimum wage increase.
Raising worker expectations, especially among those earning at or close to the $210 weekly minimum, Mr Foulkes said: “There is a discussion at the Tripartite Council level but there haven’t been any definitive recommendations from the council at this point.”
However, Mr Goudie, who said he was personally “not big on the minimum wage” as a concept, dashed any optimism by totally refuting the minister’s statement. “There’s absolutely no discussion at the National Tripartite Council on the minimum wage,” the well-known human resources consultant told this newspaper.
“The reason there hasn’t been is because inflation is very low and there’s very strong concern about the ease of doing business. The last thing we want to do right now is increase the cost of business.”
He continued: “I can tell you unequivocally there’s been no discussion at the National Tripartite Council. I don’t know who’s saying that. If Dion Foulkes is saying it, it’s not true and I’ll stand by that.
“There has been no discussion on it, and I’m the one who led all the research last time on the minimum wage when it was increased from $150 to $210 per week. We had considered the idea of reviewing of every couple of years but, because inflation is low and the economy as we all know is awful, it’s not been on our agenda.”
The first, and last, increase in the minimum wage occurred in mid-2015 in a bid to cushion the impact of Value-Added Tax’s (VAT) introduction - and associated cost of living increases - on low income earners.
The 40 percent rise to $210 per week was the first such occurrence since the minimum wage was introduced by law in The Bahamas in 2002. Pressure for further increases has come at regular intervals due to The Bahamas’ economic difficulties over the past decade, especially when factors such as the VAT rate rise to 12 percent reduce household purchasing power.
Many Bahamians argue that $210 per week, or $840 per month, is not a “liveable” wage and it is impossible to make ends meet with such an income - especially if the worker has a family to support - given the constant rise in the cost of living.
However, minimum wage increases come with other consequences. They inevitably increase employer costs, which can result in companies laying-off staff or becoming reluctant to take on new hires.
Given that those earning minimum wage salaries tend to be young workers, such as school leavers, just entering the workforce, any reluctance by employers to hire at an increased salary could create barriers to entering the world of work. There is also a social cost to this, as young, unskilled minimum wage earners are often those responsible for the current level of crime.
Companies could also choose to pass increased minimum wage costs on to consumers, raising the cost of living, while any increase in salary at the workforce’s lower end can result in greater expectations for a rise among higher-salaried workers - leading to cost-push inflation.
Jeffrey Beckles, the Chamber of Commerce’s chief executive, last night said the issue of minimum wage increases cannot be viewed in isolation from the problems facing the private sector and wider Bahamian economy.
“My view is the idea of an increase in the minimum wage cannot be seen in isolation,” he explained. “All things considered, the way things have gone in the last three years with the business community, it has to be a discussion in the context of wider issues.”
However, Mr Goudie told Tribune Business that the National Tripartite Council, which was created as the forum for resolving all workplace, industrial relations and labour matters, is sticking to the 16 projects detailed in its three-year strategic plan.
Heading that list is the creation of productivity legislation, and a National Productivity Council to oversee its implementation, in a bid to boost workplace output and enable The Bahamas and its private sector to compete more effectively in a world economy economy that is becoming ever-more technology driven.
The effort is being spearheaded by Edison Sumner, the former Bahamas Chamber of Commerce chief executive, and his consulting firm, with Mr Goudie yesterday describing the focus on improved productivity as a “win-win” for all given the potential it held to increase worker salaries and incomes.
“The number one priority was setting up the National Productivity Council. That’s the number one priority we are working towards,” he disclosed. “Edison has been working on meeting groups all through the country.
“I’m going with him to Long Island in September, and we are doing everything to make sure we get this right. We’re talking about increasing productivity, not wages. From there Edison will produce his final report and make recommendations to the Government for a National Productivity Council.
“That’s our number one priority. There are others, but if we’re going to talk about anything, let’s talk about that. We’re making huge progress on that, consulting with the trade unions, the Chambers of Commerce, civil society. We’re having Town Hall meetings in the Family Islands. No one can say they’ve not had their input on this.”
Mr Goudie added that the productivity reform effort was being aided by the International Labour Organisation’s (ILO) Caribbean office, and recommendations were likely to be submitted to the Government on the proposed legislation by October.
“Our ranking on productivity is awful, our ranking in the ease of business is awful,” he told Tribune Business. “We have to fix it. People are talking about how workers are so unproductive. We’re awful in this country and have got to fix it. We’ve got to work at this and get the right solutions in place.”
Mr Goudie said The Bahamas’ effort would seek to learn from other nations that already have Productivity Councils, such as Jamaica and Barbados, and “use it as best practice” in crafting its own solution.
He argued that the emphasis should be placed on productivity, rather than minimum wage increases, because improvements in the former would create a rising tide that ultimately lifts all boats - the economy, individual companies and, eventually, worker earnings.
“I’m not big on minimum wage,” Mr Goudie told Tribune Business. “I’ve always been of the view that if somebody wants to increase their wages, what they should do is make themselves more productive by increasing their education levels and working at it.
“You don’t expect somebody to keep increasing your wages because you are there; you get more money because of the merits of what you bring to your job.... I’m inclined to say: ‘You earn what you deserve’. That’s how I grew up. You get paid for what you produce.
“If you don’t keep on increasing your productivity, why should you get more? You don’t get it when you are lazy, sitting on your backside doing nothing. I didn’t get to be a high level human resources consultant by doing nothing. I went to school, did extra courses. I worked to get where I’ve gotten, and you did too,” he continued.
“Why should I keep getting increased wages if I’m not increasing my productivity? That’s why we’re focusing on a National Productivity Council so people become more productive, earn more money for their company, everything becomes more productive and they earn more money for themselves. Everyone gains. It’s a win-win situation.”