senior reporter
peter.christopher@guardian.co.tt
An increase in the minimum wage from $17.50 to $30 would mean more money in the pockets of workers, but might not lower the cost of living.
Economist Dr Marlene Attzs explained that such an increase, a 71 per cent rise, might cause a domino effect and the wider public will face an even more perilous situation in terms of their spending power.
“One of the things that is very evident in the country is that the cost of living is increasing and persons who are on fixed incomes and minimum wages are in fact feeling a significant strain as prices escalate. Now, having put that in on the table as the first point, there is also the consequence of an increase in the in the minimum wage to $30.
“It means that the cost of labour is going to increase and once the cost of labour increases, it means that the cost of goods and services coming to the consumers will also increase. So the increase to $30 is actually going to have a further pressure on the cost of living now,” said Dr Attzs, who instead recommended that focus to be placed on addressing the cost of living.
“Let’s look at how we could possibly try to implement measures that can benefit the society as a whole in terms of managing the cost of living, because I certainly think that while I understand the call for the increase in the minimum wage. I do think that such an increase will benefit the workers in the long run.”
Vivek Charran, President of the Confederation of Regional Business Chambers, agreed that the increase might put further strain on businesses, especially small and medium enterprises, and lead to increased unemployment.
“We also look at the level of commercial activity. In other words, revenues earned by businesses are quite low. Then we can see that if there is in fact a minimum wage hike at this moment, I can only see unfortunately the leading to unemployment as people who have employed many people may not be able to be foot the bill, the wage bill in relation to what their earnings are, or hours being cut so that in effect, the wages paid are the same as the wages that were paid before there was any rise in the minimum wage,” he said.
Charran said this is not an instance of businesses being on a different page to workers as the economic strain is being felt by both sides.
“I don’t feel that labour themselves are in this alone. I do believe business to a large extent we are in there with them together,” he said.
“I believe that this is one particular point in time after COVID that we’re all feeling the brunt of inflation, external inflation, particularly food inflation have been coming together with all the other rising costs that have happened due to things like increase in shipping rates, and so on and how things change in terms of manufacturing globally. But that’s a lot for people when they’re thinking about how far the salary is going to take us”
President of the Supermarkets Association Rajiv Diptee agreed that the focus should be on the cost of living.
“I think that you will find that the cost of living has gone up across the board. I think that there needs to be a proper examination and this is not just food prices, because obviously food prices also affected by things such as fuel prices and increases the cost of security,” said Diptee.
The Employers Consultative Association said it is not opposed to a minimum wage increase in principle but noted that several factors are involved in creating a sustainable living standard.
“Minimum wage setting is a process that considers many factors, beyond just cost of living which, if not properly balanced, can have far reaching implications for businesses—particularly small businesses, job seekers and society,” the ECA said.
“Those who are charged with fixing the minimum wage need to look at that balance which must include the participation of all social partners. The ECA is committed to engaging in tripartite dialogue on this issue through established mechanisms to do so and encourage our colleagues in the labour movement to do the same.”