Tough time for minimum wage talk

Chief Executive Officer of the Small Business Association (SBA) Senator Dr Lynette Holder believes a national minimum wage is needed in Barbados, but warns that it will be “a difficult conversation” for most companies to have at this time given the severe fallout they are experiencing as a result of the dreaded COVID-19 pandemic.

Holder told Barbados TODAY that while companies were established primarily to make a profit and meet a need, wages accounted for the majority of a firm’s operation costs. Even so, she believes that they would generally agree that a national minimum wage was needed so that people could live a decent enough life.

Dr Holder warned however, that this was something difficult for companies to discuss at this time

“I think that when you search the conscience of people they will admit from a moral perspective that you really should have an acceptable minimum wage for workers in this country. I don’t think we can deny that. We must have an acceptable minimum wage so that people can survive, people can eat, but the reality is that the macro conditions now will affect the conversation around that,” said Holder.

“Employers are going to have some trepidation about it because of the reality right now in business. It is a challenging economic environment, it is a challenging business environment. So naturally, employers don’t want to have the conversation now, but I feel at some point we must have it,” she said.

Last Thursday, Prime Minister Mia Mottley announced that by April next year a national minimum wage should be in place varied by sector, pointing out that draft legislation had already been prepared.

Mottley has not yet given any indication what the national minimum wage was likely to be, but pointed to the Barbados Labour Party’s 2018 manifesto, which had suggested a minimum wage of $8 per hour.

Currently, only shop assistants and household domestics are entitled to a minimum wage of $6.25 per hour, which came into effect in 2012.

Pointing to a SBA survey conducted some three years ago but which was not made public, Senator Holder told Barbados TODAY that at the time the majority of the 200 firms polled were generally understanding of the need for there to be a national minimum wage in Barbados.

However, she quickly pointed out that at that time the economic environment was a little bit “different”.

“I feel that the research back then gave us a general idea, which is good, but it was pre-COVID and pre this economic decline that we are in now. I think the macroeconomic conditions will change significantly what the national conversation is now around a minimum wage,” she insisted.

Acknowledging the April 2021 target date, Holder said she was committed to a plan by the SBA to conduct a new poll in the first quarter of next year to hear the views of members on the matter.

“The truth is, we must have the conversation, but I hasten to add that the macroeconomic conditions do present some challenges to us,” said Holder.

It is estimated that there are close to 10,000 formal micro, small and medium-sized enterprises (MSME) in Barbados.

Stating that at some point the economy would emerge from its economic slump and “be placed on a growth path again”, Holder said when that happened then it would be a lot easier to have the conversation about a national minimum wage.

“The truth is that we must have it. We must have the conversation because workers are deserving of a wage that at least allows them to make ends meet and to live a satisfactory life and be able to take care of themselves and their families. So that is the reality,” she stressed.

Meanwhile, in a statement issued on Monday the Barbados Employers’ Confederation (BEC) said like the business community, it supports a research-based method to determine a national minimum wage that would allow businesses to grow and employees to fairly compensated.

The BEC pointed out that while there were concerns that the current minimum wage for shop assistants could be considered insufficient given the cost of living, there was also concern from employers, especially small businesses, about the likely impact a stipulated minimum wage could have on their operations at this time.

The BEC said: “Not all businesses would be able to maintain their employment levels – either their staff complement or working hours.”

The statement also pointed out that a sectoral minimum wage could create some challenges.

“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 BEC added.
(marlonmadden@barbadostoday.bb