The Tribune

By AVA TURNQUEST

Tribune Staff Reporter

aturnquest@tribunemedia.net

LABOUR Director Robert Farquharson said yesterday that after initial research, he was optimistic that there would be an increase in the private sector minimum wage.

Mr Farquharson said private sector consultation was on track to present recommendations to Labour Minister Shane Gibson for deliberation in Cabinet before the end of the year.

He told The Tribune that while he could not speak for stakeholders, the initial research phase of the consultation process was moving forward amicably.

“Before the government takes a step like this you have to consult with social partners,” Mr Farquharson said. “We have initiated discussions and should be getting recommendations to put together a report to recommend a wage increase.

“I’m very optimistic based on the fact that the minimum wage has been set from the year 2001, this is now 2014. I think based on the information that I have seen a very serious consideration will have to be given to an increase.”

“The question is what the raise will be, and if it will have any impact on the unemployment level and costs to businesses,” he said, “but an increase is necessary.”

Social partners engaged in consultation include the National Congress of Trade Unions, the Commonwealth of the Bahamas Trade Union Congress and the Bahamas Chamber of Commerce and Employers Confederation (BCCEC).

The body will undertake a comparative analysis of studies done by the Department of Statistics and the InterAmerican Development Bank, as well as minimum wage levels in the region and the Americas, Mr Farquharson said.

His comments come days after BCCEC chairman Robert Myers renewed concerns over the dangers of a minimum wage increase.

While an increase in the $150 weekly/$4 per hour private sector minimum would boost living standards for workers at the bottom of the job market, Mr Myers told Tribune Business it might force businesses to lay-off other employees and cause the Bahamas to lose market share in sectors that compete internationally.

He warned that it was “dangerous” for the Christie administration to promise a minimum wage increase without any empirical data to assess the consequences, especially given that business operating costs in the Bahamas were already too high.

Mr Myers pointed to a July International Labour Organisation (ILO) report, “Minimum Wage Practices – Lessons to be Learned”, which underscored negative effects created by a minimum wage that is “too high”.

The report noted that if minimum wage is too high, it can hinder employment of the least experienced, skilled and qualified; have disproportionate negative impact on young workers; push up other wages; ignore productivity and ability to pay arguments; price unskilled workers out of the market; cause employers to cut back on discretionary spending such as training and fringe benefits and also increase the number of people on welfare.

However, the report also noted that if the minimum wage is too low it becomes meaningless; it can mean persons better off not working and receiving social security benefits; and enables exploitation of the vulnerable – especially the youth and least skilled.