New minimum wage tipped to take effect on New Year’s Day – rate set to be between EC$8.90 and EC$10

Many residents are feeling the pinch amid stagnant wages and rising inflation (Photo courtesy iStock)
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Some categories of workers may be able to celebrate the new year with a little more money in their pockets following yesterday’s announcement by Cabinet that a new minimum wage is expected to take effect by January 1.

The news was announced in this week’s Cabinet notes which said that the Minimum Wage Advisory Committee – put in place early this year – will submit its recommendations “in a few short weeks”.

That assurance was made by Attorney General and Labour Minister Steadroy Benjamin when Cabinet met on Wednesday.

Further consultations are ahead with local economists, bankers and others before the new rate is confirmed, a government spokesman told Observer yesterday.

Determining the increase has been the subject of intense negotiations between workers and the business community, insiders say.

While workers were calling for the current EC$8.20 rate to be hiked to EC$12.50 amid spiraling food prices and higher inflation, some employers for whom the vast majority of their revenue is already consumed by payroll had suggested the rise be deferred for another 12 months.

Increasing the minimum wage could inadvertently make it harder for low skilled residents to secure work, one source said.

The new rate is set to be somewhere between EC$8.90 and EC$10 with the final figure due to be decided by the Labour Minister, the source added.

During Thursday’s post-Cabinet press-briefing, Minister of Information Melford Nicholas gave government’s commitment to dealing with the matter swiftly.

“The report is keenly anticipated. The AG, in his capacity as the Minister of Labour, would have given us some brief insights into the thought process, but I would indicate to you that I am not going to be obliged to comment in too great a detail on that.

“We would expect by the end of next month not only will we have the report, but that Cabinet will move swiftly towards its implementation such that the much-needed relief can come to those wage earners,” Nicholas pledged.

The Minimum Wage Advisory Committee was convened in February, amid concerns that the current rate has been in place since 2015, despite the soaring cost of living.

The committee members were drawn from the Employers Federation, the Chamber of Commerce, and the Hotels and Tourism Association, among others, and were tasked with discussing and recommending a new minimum hourly rate.

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

When the Cabinet receives the report and recommendations, a decision will then be made before taking the matter to the Parliament for it to become law, the Cabinet notes stated.

In 1998, the minimum wage rose to $5.75 per hour from its previous $4.60, and in 2002 it was raised to $6 per hour. In 2006, it increased to $6.75 and in 2008 to $7.50, before the last increase to $8.20 seven years ago.

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