Banking and finance expert weighs in on minimum wage increase

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Financial expert, Donald Charles, appeared on yesterday’s Big Issues show. (Photo courtesy Behanzin Inc)
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By Makeida Antonio

[email protected]

A former banker and financial expert has suggested a holistic review of the country’s poverty assessment, beginning at the community level.

Donald Charles was a guest on yesterday’s Big Issues program, where a panel discussed the announcement of an EC$1.80 increase in the minimum wage effective January 1, 2023.

The proposed increase was announced in last Thursday’s Cabinet notes.

The notes also said that Attorney General Steadroy Benjamin assured the Cabinet that “in a few short weeks,” the Minimum Wage Committee will submit its final recommendations following several months of consultations with various stakeholders.

“When the Cabinet receives the Report and Recommendation, the Cabinet will make a decision before taking the matter to the Parliament for it to become law,” according to the notes.

The Minimum Wage Committee, including members from the Employers Federation, the Chamber of Commerce, and the Hotels and Tourism Association, was established in February amid concerns that the current EC$8.20 minimum wage had been unchanged since 2015, despite the spiraling cost of living.

The body is reportedly considering varying minimum wage structures for different categories of workers, such as those in the hospitality or construction sectors, instead of a flat minimum wage across the board.

Charles held the view that the government should conduct a study to build a database filled with “feedback across all party levels” to truly understand the issues regarding the minimum wage such as the current rate of poverty and the standard of living.

He claimed that the last poverty assessment done in Antigua and Barbuda was in 2005, with results showing an 18.4% poverty rate.

“I have not seen any data yet to really determine what is the number of persons who are going to be impacted by an increase in the minimum wage of $8.20 to $10.00, bearing in mind that that works out to EC$1,600.00 per month. To the best of my recollection, it took about EC$2,300.00 for a household to be considered as being above the poverty level.

 “Based upon the inflation taking place, what are the implications of that in terms of more persons falling below the poverty rate?” Charles reasoned during the discussion.

He also outlined how an increase in operating costs for businesses, once the new minimum wage of EC$10.00 is implemented, could affect profit outcomes.

“They will have to improve productivity and streamline operations so that employees can have a decent wage to be in a position mentally, physically, and spiritually to do the work that they are employed to do,” Charles noted.

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