The Tribune

EDITOR, The Tribune.

Khrystle Rutherford-Ferguson and her colleagues at the Bahamas Chamber of Commerce can perhaps be excused for pretending to believe that minimum wage rises in The Bahamas are an inflationary, rather than anti-inflationary measure. After all, they are self-evidently an interest group looking to secure their own narrow interests, rather than the general welfare of The Bahamas.

But government would be extremely ill-advised to give their views on this matter any merit whatsoever.

Every study in the Commonwealth Caribbean has demonstrated a direct and causal relationship between minimum wage rises and growth in the domestic economy (even in the immediate term). None has vindicated the view that minimum wage rises contribute to broad price inflation.

Rather, wage hikes offset the effects of externally driven inflation by boosting the disposable income that it would otherwise erode.

In The Bahamas, this historical reality has been unmistakable. The two most dramatic and sustained periods of economic growth in the 20th Century followed the (forced) pay rises resulting from the Burma Road Riot and the 1958 general strike.

Growth in the domestic Bahamian economy does not precede increased benefits to workers. It follows from them. Government will wait indefinitely for the supposed “right time” to raise wages if it is taken in by the blatant lie that the reverse is true.

The FNM/UBP historically entertained such views precisely because they represented the established business class and sought to entrench its interests via regressive tax and wage policies. But it is worth noting that even the funders of these regressive political movements ultimately benefited from the economic growth resulting from the wage increases that they fought tooth and nail to prevent and delay.

Protecting the interests of presently dominant businesses is not the government’s job and it does not help the general business environment. What will help it most at this time is increasing the share of national income that ends up in the hands of those who spend the most.

Of course, this will mean a higher proportion of corporate income goes to labour and less to corporate profits. It will also mean that the most stubbornly regressive business owners will go out of business, making way for more competition for the increased consumer dollars.

The chamber of commerce and its membership did not elect you, Prime Minister, and they never will. Only by continuing with your admirable and smart bias toward labour will you ensure both a growing economy and a continuation of progressive government after the next election.

ANDREW ALLEN

Nassau,

August 16, 2022