RECENTLY, LABOUR and Social Security Minister Pearnel Charles, a former trade unionist, announced that as at February 28, the national minimum wage will be increased from $4,070 per week to $4,500 per work week.This is a 10 per cent increase - meaning that the minimum wage is now $900 a day, not even a 'Manley' a day.
Not for the first time, the increase is late and will not be retroactive, and not for the first time, the increase is below the annual inflation rate, which means that the minimum wage earner is worse off this year than last year.
The recurring decimal argument is used - to give a better increase would lead to job loss. However, former trade unionist Danny Roberts now an academic, writing in the latest edition of The Sunday Gleaner, dispelled that myth.He stated, "In 2002, the minimum wage was increased by as much as 50 per cent and despite the predictions of a calamitous fall in employment, the unemployment figure actually decreased from 16 per cent in 2002 to 15.4 per cent in 2003. So, too, was the case in 2005, when the minimum wage was increased by 20 per cent and unemployment fell from 15.0 per cent in 2005 to 11.5 per cent in 2006."
Dr Omar Davies, opposition spokesman on finance, in a contrite presentation in his contribution to the debate on the minimum wage, said both sides know over the years that the justification for the minimum wage cannot be justified.He further stated that the percentage of persons below the poverty line has moved from 9.5 per cent in 2007 to 16.5 in 2010, which means 180,000 more persons have fallen below the poverty line and this would include the working poor - those on the minimum wage. He revealed, "Two employed adults in a household, paid at this level, with three dependents, will fall into this category." No one has challenged that statement, which is part of our historical records. And not a word from denominational or church councils or ecumenical bodies.
Institutionalising poverty
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What we are doing is institutionalising poverty.I wrote an article, 'Abolish the minimum wage' on January 30, 2007, "The rate is now so low that it is legalising poverty."And it has got worse since then because subsequent increases have not kept pace with the increases in food prices and transportation costs, not even annual inflation rate.Furthermore, since 2009 we have had 13 quarters of economic decline, which means that the capacity of the economy to help persons who are poor has diminished. The Programme of Advancement Through Health and Education, the safety net for persons who are poor, offers about $120 a week!
Persons who are on minimum wage have to depend on handouts, remittances, illegal or immoral activities. Furthermore, the issue of the relationship between minimum wage and poverty is not an academic one.There are stark consequences for the country.Davies in his presentation further stated that all members of the House of Representatives know the reality is that there will be an inability to send children to school every day; inability to finance basic food needs and inability to purchase prescribed medication.I could also add inability to pay rent or mortgage and, therefore, feel that they need to become a squatter.
In that 2007 article, I wrote calling for the establishment of a liveable wage.Hopefully, this will put an end to a minimum wage that institutionalises poverty. And in the meantime, we should hike the minimum wage by the percentage increase in food costs, or at least by the annual inflation rate.
Rev Devon Dick is pastor of the Boulevard Baptist Church in St Andrew. Send comments to columns@gleanerjm.com.
