The Tribune

• Will renew push once ‘strong’ economic rebound

• But back linking future rises to Bahamas inflation

• And agree ‘livable wage’ out of reach at present

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Trades Union Congress (TUC) president yesterday asserted that the labour movement will push for a further minimum wage increase to $300 per week once the economy has rebounded “in a strong way”.

Obie Ferguson told Tribune Business he “sees no reason” why the unions should not advocate for such a rise once The Bahamas has fully recovered from the devastation inflicted by COVID-19 while affirming that achieving a “livable wage” remains the ultimate goal.

He conceded, though, that the latter is a long-term objective that will likely take many years to reach. And the TUC chief also agreed with the Bahamian private sector that, rather than increase the minimum wage by large increases at infrequent intervals as has been done to-date, it should instead be indexed to the cost of living and raised annually by an amount equal to local inflation.

These smaller increases would be more digestible, and easier for Bahamian businesses to swallow in their payroll expenses, with Mr Ferguson yesterday saying that increased employment and the wider economy’s welfare remain the union movement’s immediate priority.

Trade unions had pushed for a $300 weekly minimum wage, representing a 42.9 percent increase to the private sector’s $210, in negotiations over the latest increase but the Government opted for $260 - as Tribune Business exclusively revealed it would back in late August.

Signalling that organised labour, at least for now, is satisfied with the $50 per week or 24 percent increase, Mr Ferguson told this newspaper: “We recognise that the state of the economy is such where there is only so much it can take, and we’re going to work with the Government in that regard.

“When the economy begins to turn around, and turn around in a strong way, we’d seek to have those figures revised. Our concern principally is to have as many workers employed as possible. We know how many of our workers and members have been employed, unemployed and are still unemployed.

“As the economy moves, we expect that figure to be enhanced and brought to a level that’s acceptable.” The TUC president indicated the union movement will begin agitating for an increase, which will take the minimum wage to $300 per week or $1,200 per month, once 90 percent of the Bahamian workforce is gainfully employed - meaning that the jobless rate is around 10 percent, which is close to official figures just prior to the COVID pandemic’s start.

“I see no reason why, once the economy is up and going, and once the workers play a major role in making that happen, I think it is reasonable to expect they will be asking for and seeking an adjustment to the minimum wage,” Mr Ferguson told Tribune Business.

“That’s a reasonable expectation. That’s how we’re looking forward for the labour movement. We have to make sure the economy is up, things are running progressively, and that I think will form the basis for the unions to make demands.”

However, he backed previous private sector calls for minimum wage increases to be indexed to, and match, annual inflation as measured by the Consumer Price Index to ensure future rises keep pace with the cost of living and better protect the workforce’s lowest earners.

The increase to $260 unveiled by the Prime Minister on Tuesday night is only the second such rise since the minimum wage was introduced in 2001 by the then-Ingraham administration at $150 per week. It was last raised by $60 per week, or 40 percent, in 2015 to coincide with the introduction of VAT at then-7.5 percent.

“Quite frankly we’d like to see a gradual increase as opposed to going with a big hike again,” Mr Ferguson said. “Let’s see it every three years or six years that we expect something to happen. Indexing it to inflation, as opposed to having to come and renegotiate, would be a good basis to tie it to.”

The Prime Minister, on Tuesday night, confirmed the private sector minimum wage will increase by 34 percent to $260 per week come January 2023 while admitting it will “not eliminate the hardship of trying to make ends meet”. The $50 per week rise translates into a $200 increase in take home pay for a minimum wage worker every four weeks.

“We are aware that this will not eliminate the hardship of trying to make ends meet in today’s economy,” he said. “Instead, it represents progress on the way to a livable 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.”

Peter Goudie, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) labour division chair, told Tribune Business that the private sector had already been “bracing” for a $250 per week minimum wage so the extra $10 was unlikely to create much difficulty in meeting the extra cost.

“I think the best thing to say is that businesses in The Bahamas were bracing for $250, so $260 is not going to be a major difficulty,” he said. “They were bracing for it because we knew it was coming. The Prime Minister had said it, and it was in his Memorandum of Understanding with the trade unions. 

“It’s not a surprise. When you expect something like that it’s not much of a shock. We’ll see what happens and what the reaction of other business people is, but I don’t think it’s anything people weren’t expecting. There’s not a huge amount of people on minimum wage; I think it’s less than 25 percent of the workforce. I don’t think it’s going to be a huge impact. Since business is back, and the economy is coming back, I don’t think it’s going to be as major as if it was done nine months ago.”

The Prime Minister on Tuesday night promised that achieving a so-called livable wage remains the Government’s ultimate goal but, like Mr Ferguson, acknowledged this will take time given the economy’s continued fragility. “I’m all for a livable wage, but even though that’s where we want to go we live in the real world,” the TUC president told Tribune Business.

“We’ll try to work towards it. That would be the thinking of any sensible, rationale thinking and visionary leader, but not to the detriment of the economy. It’s reasonable that we should work towards that but, particularly in light of what’s happening now and what’s likely to happen in the future, we have to be flexible. We have to be realistic, we have to appreciate the state of the economy.

“These are realities. Nothing from nothing means nothing. We need to get something in the pot so that when we stir it we have something in there. This is our country, and we need to make sure we preserve our country for future generations to come,” he continued.

“A livable wage is where we want to be, but we realise the state of the economy is not amenable to that at the moment. It doesn’t mean we will not work with the minister of labour, the Prime Minister as we’re having discussions. The time will be right to achieve that. That’s truly where we want to be.”

A University of The Bahamas (UoB) study, dated September 30, 2020, and authored by Lesvie Archer, Olivia Saunders, Bridget Hogg, Vijaya Permual and Brittney Johnson, concluded that a living wage in New Providence and Grand Bahama is $2,625 and $3,550 per month respectively.