Editorial | Life on minimum wage

A national minimum wage of $7,000 a week should be taken as a guide to employers, and it is a fact that many are paying more to their employees.

Though it has taken two years to come, the announcement by Labour Minister Shahine Robinson that the rate is to move from $6,200 to $7,000, representing a 13 per cent increase, is nothing to sneeze at when one takes into consideration the fact that public-sector wages were settled in single digit.

Persons find themselves at the minimum wage for reasons such as lack of bargaining power or an absence of marketable skills. So many workers find themselves in low-paying industries, such as food service and retail, household work and in the security sector as guards.

The opposition spokesman on labour argues that coming after two years, the minimum wage is too low. A higher rise may be right for Horace Dalley politically, but it may be economically wrong for the country. In a low-inflation climate, many low-level earners may be pushed out of jobs because their employers cannot pay more. There are, to be sure, reasonable arguments for and against the level of minimum wage increase.

Consider the impact of a pensioner who most likely operates on a tight budget and who needs the services of a household helper. Squeezed by the effects of a sliding dollar on supermarket and pump prices, some pensioners may be forced to cut the days they now employ a helper and, in the worst cases, they may have to let them go altogether. At the same time, a raise means a little more in the worker's hand. However small, it could create some ripples in the economy.

There may, in fact, be persons underpaying their workers, and the question is who monitors employers to ensure fair treatment of workers. The labour ministry ought to be proactive in ensuring that employers uphold the law and pay the stipulated minimum wage. We also believe that employers could help their workers to acquire new skills and retrain them so they, too, could upgrade their skills and thereby improve their ability to make more meaningful contributions and earn better wages.

Supporting households

Many minimum wage earners are carrying their households. They are putting food on their tables and taking care of their families in the best way they know. Many minimum wage earners plug away at their jobs for years and are able to buy their own homes and educate their children on their income. That says something about resilience and gives a good hint that the material gain from a low-paying job far outweighs the misery of unemployment.

Let us be clear about one thing: A national minimum wage is not an anti-poverty measure and should not be touted as one. The Government and its economic advisers must consider a mix of solutions that will encourage the creation of new businesses that will boost employment and improve the economy.

Unfortunately, none of this will be possible without urgent measures to stem crime so that employers do not have to spend their limited resources on keeping their workers safe and guarding their premises against gunmen and robbers. All the means of prosperity are wrapped up in the security of the nation. It's a point we have stressed repeatedly.