The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A Cabinet minister yesterday voiced confidence “there won’t be sweeping lay-offs” as a result of the 24 percent minimum wage increase despite previous warnings by petroleum retailers that they ma be forced to terminate staff.

Keith Bell, minister for labour and Immigration, speaking ahead of the weekly Cabinet meeting said all businesses had more than adequate time to prepare for the $50 per week increase that took effect on January 1. He added that the increase, from $210 to $260, also took effect following consultation with all relevant stakeholders including the private sector.

“The reality is that we live in a country where nobody should be living below the poverty line. Nobody should be working and earning a salary which is below the poverty line. I am pleased that this government was able to introduce a minimum wage, and we would have indicated when we campaigned that it was our intention to increase the minimum wage,” Mr Bell said.

“I’m satisfied that there won’t be sweeping lay-offs. The National Tripartite Council and the Department of Labour would have engaged in extensive discussions with all the key stakeholders in the country, and they would have met with them, they would have consulted with them, you have gotten their views.

“Even though, as I would have indicated when I did my communication in Parliament, that there wasn’t consensus on what the amount of the minimum wage should increase to, everybody knew that there was going to be an increase and we knew that even when we spoke that it would have taken effect this year.”

The National Tripartite Council is comprised of private sector, trade union and government representatives, and was set up to deal with all labour-related issues in the country. Tribune Business previously reported that the private sector sought a modest minimum wage increase to $230 per week; the trade unions pushed for $300; and the Government ultimately settled on $260 per week.

The $260 per week was some $10 higher than the $250 minimum wage that the Progressive Liberal Party (PLP) committed to in its election manifesto, potentially allowing it to claim a modest victory over the increase. However, Vasco Bastian, vice-president of the Bahamas Petroleum Dealers Association, warned before Christmas that the minimum wage increase may force the sector to lay-off employees unless their margins are increased.

Mr Bell, responding to these concerns, said: “I’ve not heard from any of the petroleum dealers as yet. I have heard, and I’ve seen, several things. However, I would wish to indicate to the petroleum dealers to exercise a degree of restraint and caution and not be swift to any sort of action. The reality is that we live in a country where nobody should be living below the poverty line. Nobody should be working and earning a salary which is below the poverty line.”

Petroleum dealers fear their fixed-margin business model leaves them vulnerable to being squeezed by ever-increasing operating costs - not just the minimum wage hike, but electricity bills whose fuel charge component is set to rise by up to 163 percent at the peak of summer consumption.

Dealers had been pushing for a 50 percent margin increase, which would raise their per gallon of gasoline take by 27 cents - from the present 54 cents to 81 cents. Or, alternatively, that the basis of their margin be switched to a percentage.

Mr Bell, meanwhile, reiterated that the Government ultimately intends to introduce a livable as opposed to a minimum wage. “We are about to start the discussion on a livable wage, so that’s not just the petroleum dealers but for everyone,” he added.

“All of the employees and everyone will be in a position to know what to expect in the future, so that it isn’t ad hoc and isn’t haphazard. It isn’t something that was planned or something which is thrust upon them. But there is an expectation that everybody would know that there will be an increase in wages as we proceed and go forward.”

One study by the University of The Bahamas pegged Nassau’s monthly living wage at $2,625 per month, while the equivalent for Grand Bahama was $3,550 per month to sustain a family of four. The private sector described these findings as “incredible” and impossible to accomplish.