Minister of Labour Colin Jordan on Tuesday announced plans to tie the national minimum wage to inflation to protect low-income workers from the rising cost of living.
He revealed the initiative at the Caribbean Policy Development Centre (CPDC) Regional Policy Meeting at the Crane Resort, stressing that it would provide muchneeded economic stability for the nation’s workforce.
The proposed indexing will introduce an automatic adjustment mechanism linking wage increases directly to changes in inflation, ensuring that salaries rise in line with the cost of living.
The minimum wage was last adjusted in 2021 and is considered to be an important milestone in protecting workers from exploitation and providing fair compensation. Since then, inflation has steadily eroded the purchasing power of this wage.
Jordan acknowledged this challenge: “It is one thing to set a rate at one point in time, but inflation will reduce the purchasing power of that amount.”
He emphasised the importance of taking action now to prevent workers from falling behind in an economy where prices for essential goods and services continue to rise.
“We are also going to be indexing [the minimum wage] so that the purchasing power of those who earn at the lower levels of our work environment… is maintained at a level where workers are able to live and eat,” the labour minister said, stressing the government’s commitment to ensuring fair compensation for the most vulnerable workers.
The indexing of the minimum wage will replace the current model, where the minimum wage is reviewed periodically—often after several years—which can result in large jumps or wage stagnation.
By shifting to this model, the minister noted, the government was seeking to provide both fair and predictable wage increases for workers. He explained that without this reform, many workers would struggle to maintain a decent standard of living.
He said the new system would allow for more timely adjustments that prevent the “erosion” of earnings.
The move to introduce wage indexing has raised concerns in some quarters. The Barbados Employers’ Confederation (BEC) previously called for a balanced approach that considers both productivity and the cost of living when making wage adjustments.
Despite these concerns, Jordan confirmed that a Cabinet paper outlining the specifics of the indexing mechanism is being prepared for submission to ministers later this month. Once approved, the new framework will be incorporated into Barbados’ wage policy, ensuring that the earnings of the country’s lowest-paid workers keep pace with inflation in the future. (RG)