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BEC: National minimum wage should be research-based


BEC: National minimum wage should be research-based

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Following is a statement from Barbados Employers’ Confederation (BEC) on the issue of implementing a national minimum wage.

Prime Minister Mia Amor Mottley announced during a press conference last Thursday that Government plans to move in this direction.

Mottley said that by April next year, Barbados could, for the first time, have a national minimum wage along with fixed amounts for different sectors.

“On March 1, 2012, the minimum wage was raised to $6.25 per hour for shop assistants and household domestics in Barbados. Legislation at the time did not allow for a national minimum wage, however many sectors utilise the rate as a benchmark.

“In 2012, the business sector agreed that the rate of $6.25 was less than ideal.

“However, considering the poor economic landscape, there was recognition that if a higher rate was declared, some businesses would be forced to reduce their staff complement in order to continue operations. The business community therefore supported that the introduced rate be followed by incremental annual increases. Since then, the Minimum Wage Act 2017-4 was passed, which established a Minimum Wage Board, which is tripartite in nature, with the expressed purpose to advise the minister on all matters relating to the fixing of a minimum wage including the:

• National minimum wage to be paid to an employee;

• Minimum wage to be paid to a specified group or sector of employees; and

• Terms and conditions of service and the minimum work conditions of an employee to whom a minimum wage applies.

Over eight years have elapsed since the last increase to wages for shop assistants. From recessions to unemployment, and increases in bus fare, taxes, and inflation, changes to the socio-economic climate mean that the current minimum wage is considered insufficient to allow workers to meet basic living standards. Conversely, there is concern from employers, in particular small businesses, with respect to the impact of a stipulated minimum wage. Not all businesses would be able to maintain their employment levels (either their staff complement or working hours).

“A national minimum wage is more common across the world and is featured in some of our Caricom neighbours as well. It ensures that there is a fair standard below which no worker should fall and market rates and employer discretion will determine wages above the threshold. Sectoral minimum wages ultimately outline which sectors/industries are perceived to be more valuable depending on various factors – for example, private versus public sector; or in respect of working hours where some sectors may work longer hours, such as health care.

“As a sectoral minimum wage is applicable by industry and not by job, the result could be a division into multiple pay brackets as is seen in some countries. This can lead to confusion as workers may not know what applies to their sector, as well as greater difficulty in monitoring and ensuring compliance. It can also result in large pay divides and in sectors being perceived as less valuable. Therefore, the introduction should be carefully considered and advised by research, economic and social analysis.

“The Barbados Employers’ Confederation and the business community have always supported a research-based method to determining a national minimum wage that will allow businesses to grow and employees to be compensated fairly. We are aware that the Minimum Wage Board requested research to ensure that such an approach would be taken. Therefore, the BEC supports methodologies that allow this to occur, and which would ensure that every Barbadian works for a wage which supports a decent standard of living. (PR)