#BTEditorial – Of low wages, pandemics and recessions

It was the revered war-time leader and British Prime Minister, Winston Churchill, who famously said, we should never waste a good crisis. For it is at the most challenging of times, that we often see the best in human ingenuity and adaptiveness.

There is no doubt that in moments of difficulty, we are forced to question the effectiveness and value of old norms. In attempts to bring about change, we accept the reality that things are likely to go off track, and that new, often untried prescriptions, will be offered.

For decades, there have been calls in Barbados for a relook of the minimum wage regime, as too many of our citizens languish at the bottom of the economic ladder, barely eking out a living from basic wages, that leave little to no room for such workers to improve their lives.

We are talking about a range of employees – from security guards, and gas station attendants, to domestic workers and many categories of hotel and tourism employees.

It is these workers, who today are carrying a substantial portion of the risks during this COVID-19 pandemic, as they are forced to attend work in person. They do not have the luxury like others, who can continue to work from home or be at home during national shutdowns and continue to be paid their wages and salaries.

The need to address the issue of a more broad-based minimum wage system in Barbados, was evident late last year, when after a decade of unresolved disputes, security workers at the multi-national firm, G4S, decided enough was enough and took to the streets in industrial action against the company.

The long-running wrangle, which was resolved after robust intervention by Prime Minister Mottley, saw the firm defending its wages policy and arguing that higher wages made the company less competitive in the security services sector.  This issue will likely be a point for consideration when seeking to expand the minimum wage structure in the country.

The Barbados Employers’ Confederation (BEC), the representative for employers, points out on its website: “There is no national minimum wage in Barbados, rather there is Minimum Wage for Shop Assistants. The definition of a Shop Assistant as found in the Shops Act, Cap 356A is “any person, except a member of the occupier’s family, wholly or mainly employed in a shop, in connection with the serving of customers, the receipt of money or orders for goods, or delivery or dispatch of goods”.

The current minimum wage for shop assistants is $6.25 per hour and this figure is regularly used as a guideline across the country in setting wages.

In 2021, a worker receiving the current minimum wage in a 40-hour week, is likely to receive a gross pay of $250, out of which National Insurance is deducted. And assuming such workers do not have the benefit of their own transportation or access to a vehicle, they could spend up to $70 out of that pay package, on bus fares alone.

We know from our lived experiences, that a gross pay of $250 weekly is not a livable wage in Barbados.

That brings us to the February 5 announcement from the Ministry of Labour and Social Partnership Relations, that Minister Colin Jordan, intends to move ahead with a national minimum wage and a Sectoral Minimum Wage in Barbados, with effect from April 1, 2021.

In the current environment, this is by all calculations, a bold move by Minister Jordan, particularly at a time when thousands of workers have lost their jobs and those who are lucky to be enjoying a wage or salary, are grateful to be doing so.

As such, the decision to move ahead must be applauded. But we anticipate there will be serious push-back from the country’s private sector. The Barbados Chamber of Commerce & Industry (BCCI) has already warned that more job losses are likely as the COVID-induced recession deepens.

According to a notice from the Ministry, the Minimum Wage Act at Section 7 (2) (b) allows for a period of no less than 40 days from the date of the initial notification, during which objections may be received.

The main proposal from the Labour Ministry, is an attempt to introduce a national minimum wage of $340, for persons working a 40-hour week. The proposed minimum overtime rate would be $12.75 per hour for ordinary days and $17 per hour for public holidays.

As earlier stated, we are certain that this ambitious but worthy effort to address the social and financial difficulties facing low-wage workers in this country, will face some roadblocks.

A similar attempt is being made by the new Biden/Harris administration in the United States of America (USA). The new administration there in the USA, wants to expand the pay of low-wage workers in America from US$7.50 per hour to US$15.

While the big corporates there have been enjoying record profits, even during the pandemic, millions of low-income workers, including many on the frontline, have not benefited from these record profits.

The main arguments surrounding the plan are that while it will certainly help workers at the bottom of the scale, and increase economic activity because these workers will spend more, a minimum wage increase across sectors will harm small businesses and companies already struggling during a deep recession and the worse pandemic in over a century.

We expect similar arguments will occupy the attention of the Mottley administration here at home.