Prime Minister Philip “Brave” Davis. Photo: BIS
By KHRISNA RUSSELL
Tribune Chief Reporter
krussell@tribunemedia.net
PRIME Minister Philip “Brave” Davis has announced an increase in the country’s minimum wage from $210 to $260 per week.
The higher wage will be retroactive in the public service going back to July of this year and for those in the private sector, the change will begin in January 2023. The timeline, he said, is to give employers time to prepare for the increased expense.
Additionally, as Bahamians continue to grapple with the high cost of living compounded by inflation, Mr Davis revealed that 38 new items will be subject to price controls.
According to Mr Davis this means that the government will limit the wholesale and retail markup on items like diapers, and food, including chicken, eggs, bread, bananas, apples, oranges, broccoli, onions, and potatoes.
These items, he said, are being added for at least a six-month period, at which point the government will review and evaluate the impact on businesses and consumers. The profit margin on price-controlled drugs is also being reduced to provide additional relief to Bahamians, he said.
“During an inflation emergency, it’s important to take the steps we can to improve affordability,” the prime minister said in his first national address since being elected to office in September 2021.
“Of course, nothing is more important to helping families make ends meet than higher wages. The last time the minimum wage was raised in our country was 2015. A new increase has long been overdue.
“Tonight, I’m announcing that the country’s new minimum wage will be $260 a week.
For minimum wage earners in the public service, the change will be retroactive, going back to July of this year.
“For minimum wage earners in the private sector, the increase will begin in a little less than three months, in January of the coming year, allowing employers time to prepare for the increased expense.
“The higher minimum wage will benefit tens of thousands of Bahamians. Will the increase help? Yes, it will. It was long awaited, long overdue, and the extra money every week will make a difference.
“However, we are aware that this will not eliminate the hardship of trying to make ends meet in today’s economy. Instead, it represents progress on the way to a liveable wage. The raise was negotiated by the National Tripartite Council, which includes the government and representatives from the private sector and unions.
“Our shared goal was to raise the minimum wage without having a negative impact on employment or job growth, and we believe that has been achieved.”
The new minimum wage comes against the backdrop that a series of events since 2017 have negatively impacted Bahamians.
Mr Davis highlighted the 60 percent increase in VAT in 2017, a stagnant economy, no significant new investment and billions of new borrowing in 2019, coupled with Dorian, a Category 5 hurricane.
Later, in 2020, a pandemic that led to closed borders, a curfew, and wave after wave of lockdowns.
“And then, just as we started to recover, over this last year, a global inflation crisis led to prices rising across the board faster than they have in many decades.
“I want to emphasise just how big a shock this has been to households and businesses – we haven’t seen double-digit increases in global inflation like this in nearly 40 years.
“The COVID pandemic caused – and continues to cause – major disruptions in manufacturing and supply chains.
“Last February, Russia, a major energy producer, invaded Ukraine; the war, and the sanctions that followed, and the geopolitical turbulence, sent high oil and gas prices even higher.
“The inflation crisis has spared no country, but small island nations like ours, dependent on imports, have been particularly hit hard.
“The cost of living was already far too high in The Bahamas; this global inflation crisis has made life even more unaffordable,” Mr Davis said.
As a result he said his administration believed it is time to provide relief now.
Comments
bahamianson 2 years, 2 months ago
Extra money will not make a difference. Choices will make a difference. If you take the extra and buy more numbers , you a re back to square one. If you now go to Naughty Johnnys instead of Wendys, you are still back to square one. You need to educate the population about spending on needs and not wants.people will still have to resort on Social Services. That Iphone will be under the Christmas Tree this December, but the electeic bill will not be paid.
John 2 years, 2 months ago
I do not totally agree with you about the numbers buying and the eating out and the I Phone under the Christmas Tree. Many Bahamians have become frugal , especially under the curfews and lockdowns under the previous Minnis administration, You can see this how on the weekends and on holidays tge streets are mostly empty. People go to church on Their Sabbath then go back home. Those who go out for brunch or dinner has included it in their budget and feel that despite things being tough and times being hard, they can’t give up on lifel completely and are entitled to have a good time once in a while . The biggest problem for people who will receive minimum wage increases is inflation and the rising cost of fuel, food and electricity . And then there’s the looming recession, which may cause people to become unemployed . Of course this inflation followed possibly by a recession willl be global and governments , including The Bahamas government will be limited in what it can do. If the cost of living increases are greater than the wage increases, then people will not be any better off. And if the wage increases are so much that they drive up the cost of living even more, then the workers will be even worse off, if a company has 1,000 workers that will have their pay increased in January, that is an additional $50,000 ( yes Fifty Thousand Dollars) expense? Added to the company’s payroll expense EVERY WEEK! So where will this money come from? Few businesses operating in The Bahamas can increase their sales by $50,000.00 a week, And it doesn’t stop there: the workers at a higher pay scale may say? ‘if you increase their pay ( minimum wage), you must also increase mines,
The_Oracle 2 years, 2 months ago
Minimum wage is an entry level salary. Any employee still on minimum wage Beyond one year Needs to evaluate a) their skills/efforts or b) the caliber of company they work for. Having said that I wonder how many people this renders “unemployable” aka, sad to say, not worth $260/week? In any case this will push the cost of living up, just as expanding price control pushes up the cost of all other items. Stupid is as stupid does.
KapunkleUp 2 years, 2 months ago
You make an interesting point. I wonder what percentage of the workforce is actually being paid minimum wage right now?
John 2 years, 2 months ago
Unfortunately because most of the companies are small and don’t have different levels of management a large majority of the workforce is at or still around the minimum wage level. So if a worker leaves one fast food restaurant to go work for another, the pay will generally be the same. One will say well why didn’t they get a promotion. Well sometimes a worker may be at the supervisory level. But for some reason they may have to leave the job, say for pregnancy or illness. So when they go back into the workforce, there may be no jobs available at the supervisor level so rather than remain unemployed, they take an entry level job. Same thing happens in construction. Not that a skilled worker may go back to minimum wage, but a skilled carpenter may find himself working as semi-skilled when the job winds down. Again these workers would rather accept the position rather than remain unemployed.
tribanon 2 years, 2 months ago
And Cruel Davis will now tell Fat head Halkitis and Simple Simon Wilson to publicly announce that this new minimum wage will go a long ways towards keeping our nation's unemployment rate below 5%. LMAO
ThisIsOurs 2 years, 2 months ago
Which is to say... in reality more people will join the unemployment line as businesses cut 2 out of 10 jobs to fund the pay increase or they will give less hours to the same compliment.
TalRussell 2 years, 2 months ago
Premiership could've, should've skipped right to pass by a unlivable weekly wage $260 by hopscotching ton over a national framework for the implementation of a National Guaranteed Livable Weekly Minimum Income (NGLW) of $350 for (childless) individuals and $500 for (childless) couples *eliminating work and other requirements from minimum income guarantee benefit __ Yes?
DDK 2 years, 2 months ago
Well, these are career politicians who only care about their own income and whatever they can filtch from the "consolidated fund". They are certainly not economists or rocket scientists. Further suspect that whoever does give them financial advice cares not a whit about Joe Public or the business community.
SP 2 years, 2 months ago
LOL...The Bahamas is not a "real" place!
ThisIsOurs 2 years, 2 months ago
Which businesses are likely to have minimum wage workers? You can expect to see price increases there, because I'm convinced most bahamian businesses have no idea of how to price or the importance of pricing correctly.
Food stores Any business with a Large warehouse Hotels Cleaning companies Restaurants Small businesses <10 employees Landscaping companies
More price increases, higher unemployment, higher borrowing costs, we just dragged and clawed our way closer to the edge of the fiscal cliff
ohdrap4 2 years, 2 months ago
You are right about businesses not knowing how to price.
There are not many making the current minimum wage where I work, but some will be there when the increase comes.
But, businesses, like governments, are slow to cut costs in the name of efficiency, rather raising prices instead. That makes them lose customers in the long run, as customers lose the habit of patronizing.
Also landlords are increasing rents like crazy in commercial buildings.
Dawes 2 years, 2 months ago
I am not sure if this will be a huge increase on businesses, as many don't have minimum wage employees, and if they do they are not a large part of the work force. Though i can see it may affect those who rely on gratuities and commission to make up the pay being affected (if they are not taken into account when working out the minimum wage). It will have an effect on those earning just over the new minimum wage, as any increase they may have got is now used by those below. The increase in BPL will be have a larger effect on them and this will lead price increases.
ThisIsOurs 2 years, 2 months ago
What do security officers get paid per week? I dont believe this is nothing. It will affect the companies with greater percentage of low skill workers. 10 employees at minimum wage is 26000 extra expense per year. If you were only making an annual profit of 50,000 that is a gigantic blow. I do not think they performed a full economic analysis on this to understand who and how businesses would be impacted
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