Raphael John-Lall

The ‘eco­nom­ic health’ of a coun­try is im­por­tant is de­ter­min­ing the pos­si­bil­i­ty of a ‘liv­ing wage’ in T&T, ac­cord­ing to the coun­try’s largest em­ploy­er as­so­ci­a­tion, the Em­ploy­ers Con­sul­ta­tive As­so­ci­a­tion (ECA).

Last Sun­day, the Sun­day Busi­ness Guardian pub­lished an ar­ti­cle on the is­sue of the liv­ing wage with views from econ­o­mist Dr Ronald Ramkissoon and in­dus­tri­al re­la­tions ex­pert Trevor John­son, who has al­so lec­tured in trade union stud­ies at the Cipri­ani Col­lege of Labour and Co-op­er­a­tive Stud­ies.

The ILO re­leased a re­port on wages and specif­i­cal­ly the liv­ing wage in Feb­ru­ary high­light­ing its im­por­tance but urg­ing busi­ness, labour and the gov­ern­ment to have di­a­logue on such an ini­tia­tive.

The ECA, which did not re­spond in time for last Sun­day’s ar­ti­cle, said last week that per­haps the most ob­vi­ous chal­lenge of in­tro­duc­ing the liv­ing wage in T&T is the cur­rent lim­i­ta­tion on da­ta for de­ci­sion-mak­ing.

“The con­cept of a liv­ing wage is ul­ti­mate­ly an ev­i­dence-based ap­proach and there­fore, liv­ing wage set­ting re­quires rel­e­vant da­ta on per­ti­nent eco­nom­ic fac­tors, labour mar­ket sup­ply and de­mand, as well sec­tor growth and over­all per­for­mance. It al­so re­quires da­ta per­tain­ing to house­hold ex­pen­di­ture – main­ly cost of liv­ing.”

The ECA added that the eco­nom­ic con­di­tions of a coun­try play a cru­cial role in de­ter­min­ing the fea­si­bil­i­ty of op­er­a­tional­is­ing a liv­ing wage.

“If there is a de­cline in na­tion­al rev­enue, and a high deficit, high wages be­come un­sus­tain­able and can ul­ti­mate­ly do more harm than good. As such, na­tion­al cir­cum­stances mat­ter. Cur­rent­ly, there is ex­pect­ed to be a pro­ject­ed fis­cal deficit of ap­prox­i­mate­ly $9 bil­lion for 2024 as a re­sult of short­falls in pro­ject­ed rev­enue.

“Ad­di­tion­al­ly, if we look at the busi­ness land­scape, we see that not un­like many oth­er de­vel­op­ing coun­tries, Mi­cro, Small and Medi­um En­ter­pris­es (MSMEs) are the back­bone of our econ­o­my ac­count­ing for rough­ly 85 per­cent of reg­is­tered busi­ness­es,” ac­cord­ing to the em­ploy­ers’ group.

The ECA al­so stat­ed that in 2023, it pub­lished a re­port on its as­sess­ment of the “Busi­ness Re­silience Land­scape” with­in T&T and one key find­ing was that MSMEs en­counter sig­nif­i­cant fi­nan­cial con­straints.

The re­port fur­ther high­light­ed that there is a de­fi­cien­cy in T&T’s busi­ness re­silience ecosys­tem, which means that busi­ness­es are high­ly vul­ner­a­ble dur­ing dis­rup­tive events, par­tic­u­lar­ly MSMEs, many of which op­er­ate in en­vi­ron­ments with mul­ti­ple at­ten­dant risks – such as nat­ur­al dis­as­ters, crime, util­i­ty out­ages, ran­somware and oth­er cy­ber­se­cu­ri­ty threats.

“Based on this par­tic­u­lar con­text, which shows the many chal­lenges faced by MSMEs in T&T, a liv­ing wage would be dif­fi­cult to im­ple­ment – es­pe­cial­ly giv­en the ab­sence of ro­bust da­ta. The ILO’s ap­proach to de­vel­op­ing liv­ing wage poli­cies is quite clear.

“Best prac­tice in­di­cates that, ‘cre­at­ing an en­abling en­vi­ron­ment for sus­tain­able en­ter­pris­es, as well as mea­sures to raise pro­duc­tiv­i­ty, are key to al­low­ing sus­tain­able wage growth and sup­port­ing the pay­ment of high­er wages. Fur­ther­more, ef­forts to op­er­a­tionalise liv­ing wages need to be ac­com­pa­nied by mea­sures to en­cour­age for­mal­i­sa­tion’.”

Cost of liv­ing

The ECA in its state­ment said it is im­por­tant to re­alise that wage set­ting, be it min­i­mum or liv­ing, is an el­e­ment of a wider pol­i­cy ecosys­tem aimed at over­com­ing pover­ty.

“How­ev­er, in ad­dress­ing the cost of liv­ing, it is al­so cru­cial to look at oth­er poli­cies and mea­sures that can fill the gap to cov­er the needs of work­ers, such as ac­cess to pub­lic goods and the qual­i­ty of these ser­vices.

“As a net im­porter, the cost of food is an­oth­er area that dri­ves up the cost of liv­ing and in­vest­ing in food se­cu­ri­ty through the de­vel­op­ment of agri­cul­tur­al en­ter­pris­es can fur­ther con­tribute to eas­ing the bur­den on the pock­ets of con­sumers while al­so dri­ving the cre­ation of sus­tain­able en­ter­pris­es which in turn can pro­vide de­cent jobs for our cit­i­zens.”

The ECA con­clud­ed by say­ing that the con­ver­sa­tion on a “liv­ing wage” will no doubt con­tin­ue, and the ECA is com­mit­ted to en­gag­ing in this di­a­logue in the in­ter­est of a mu­tu­al­ly ben­e­fi­cial out­come.

“In our as­sess­ment, the cen­tral role of the ILO will be piv­otal in this process, par­tic­u­lar­ly in re­spect of the de­vel­op­ment of an as­sess­ment frame­work and method­ol­o­gy to guide na­tion­al con­ver­sa­tions. Nonethe­less, there is still much to be done at the na­tion­al lev­el to cre­ate the right en­vi­ron­ment and con­di­tions to re­alise any sus­tain­able change in na­tion­al wage set­ting process­es.”