The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s top labour official yesterday said almost 60,000 Bahamian workers will benefit from a recommended minimum wage increase that will soon be submitted to the Government for its approval.

Robert Farquharson, the director of labour, declined to provide any details on the likely increase or timing of its submission to the Government but said the National Tripartite Council will likely assess whether future minimum wage rises should be linked to annual inflation rates.

“There are approximately 235,000 in the workforce, and based on information from the Department of Statistics we estimate 25 percent to be on minimum wage or will be impacted by a rise in the minimum wage,” he told Tribune Business.

“I can tell you that our research has begun, and we are deep into the research. I cannot give you a timeframe, but we have done extensive work and expect a recommendation [on the minimum wage] to be submitted in the not-too-distant future.”

Mr Farquharson did not break down the 25 percent, or near-60,000, who would benefit from a minimum wage hike although it is possible that figure includes a significant number of persons who make the majority of their income in commissions or tips. Such workers are often paid a low basic salary, and those numbers will also include the likes of food store and gas station workers.

The director of labour spoke amid forecasts that The Bahamas faces “brutal” inflation that will only start to gradually ease come 2023. The International Monetary Fund (IMF), in its concluding statement on the recent Article IV consultation with The Bahamas, predicted that “end of period” inflation - based on the consumer price index (CPI) - will surge to 6.7 percent this year, having jumped from 1.2 percent in 2020 to 5.5 percent last year.

While Bahamian inflation, which is largely driven by external factors given that the country imports virtually all it consumes, is projected to ease somewhat to 3.5 percent in 2023, Mr Farquharson said the National Tripartite Council - the body that deals with all labour-related matters in the country - will likely assess whether to index the minimum wage to cost of living increases moving forward.

“I suspect consideration is being given to that as well,” he confirmed. “That’s one of the pieces to-date that we’ve been studying and is in our processes, and are going to find a way to tie any increase to the CPI. There are a number of other factors such as the rate of inflation.”

Peter Goudie, the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) representative on the Council, yesterday agreed that annual minimum wage increases tied to inflation would be more manageable for businesses to absorb than the large rise experienced previously. Introduced at $150 per week in 2001, it has only been increased once - by 40 percent to $210 in 2015 - during its 20-plus years in existence.

The Davis administration had previously mulled a rise to $250 per week, and Mr Goudie said: “When I went to address the members of the Chamber of Commerce in Freeport in 2015, when I raised the minimum wage then some of the companies said you shouldn’t leave it so long in between because it kind of jumped at them.”

The IMF, in its Bahamas assessment earlier this week, warned: “Inflationary pressures are building in line with global developments and are expected to ease only gradually. Despite this, it will be important to allow higher international food and energy costs to pass through to domestic prices alongside targeted support to protect the poorest members of society.

“Higher food and oil prices, including because of the effects of the war in Ukraine, could erode consumer demand and impose a particularly heavy burden on the vulnerable.”