Published by Khyle Quincy Parker, The Nassau Guardian, August 16th, 2022
Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC) Chair Khrystle Rutherford-Ferguson yesterday vowed that the BCCEC would use its seat on the National Tripartite Council to ensure that the increase in the minimum wage being contemplated by the government does not stifle economic growth in the country.
Speaking with The Nassau Guardian yesterday, Rutherford-Ferguson stressed that the private sector is not opposed to a “reasonable” increase in the minimum wage, but warned that the potential knock-on effects of “a material increase” might cost some workers to lose their jobs and drive some stakeholders out of business.
Last week, Labour Minister Keith Bell told The Nassau Guardian that the minimum wage is still being debated by Cabinet.
“There are several variables to consider, and there are several components that you can choose from in terms of which one you want to adopt. But there has to be widespread buy-in, not only by just government, but also by our social partners.”
The Davis administration promised to raise the minimum wage in its Blueprint for Change. Bell noted yesterday that the proposals include raising the minimum wage for public servants. Economic Affairs Minister Michael Halkitis has said the government could raise the minimum wage from $210 to $250 per week.
Speaking with The Guardian yesterday, Rutherford-Ferguson stressed the need for caution with regard to implementing a new minimum wage, noting that it cannot be done in a vacuum.
“The first knock-on effect is that a material increase in the cost of labor will lead to inflation,” Rutherford-Ferguson said.
“It would lead to further inflation of the price of goods and services to the consumer, at a time when inflation is already high. Factors external to the business community and the country are what’s behind inflation, and this is being seen all over, not just here.”
The second knock-on effect to an increase in the minimum wage would be seen if the inevitable inflation is not tolerated well by the consumer, she said.
“If the consumer decides not to buy or dramatically reduces spending on goods and services, that will result in the downsizing of labor, further affecting the unemployment rate,” she said.
“The unemployment rate is high because of Dorian, because of the pandemic, so this is something that in any event must be controlled, or as a result, businesses can close – those businesses that would be impacted by the inflation on goods and services not being tolerated well.”
Rutherford-Ferguson said that any increase must be “reasonable” and take into account what is happening within the business community.
“The last thing that should happen, that anyone would want, is for labor to be retracted as a result of a material increase in the cost of labor, because of a material increase in the minimum wage,” she said.
“This can hurt the very same people who the government may be seeking to help. Some of the larger companies may be paying above minimum wage in any event, and for certain levels within companies they pay above minimum wage, but when you think about the small businesses, there are small businesses that can only afford to pay minimum wage to make sure that they are in compliance with our labor laws. So that is definitely something to take into consideration.”
The BCCEC chair reiterated that the government has committed to consult on the issue.
“The National Tripartite Council does have the purview to deliberate on this issue. The chamber is a member of the tripartite council [which represents the unions, the government and the private sector]. But for the tripartite council to make a decision, it requires a unanimous vote. As always, the chamber stands ready to use that body to find a suitable middle ground, that will provide for the increased cost of living while not stifling economic growth in The Bahamas. That’s the key. That is the balance. You have to provide for the increased cost of living, but we have to make sure that we don’t do it by stifling economic growth in the country.”
Rutherford-Ferguson believes there is an untold story as it relates to the impact of inflation on Bahamian business.
“Generally speaking, the cost of doing business has gone up in this country, and if there are other conversations happening that will yet again add to the cost of doing business, then we need to find a solution on how we reduce the cost,” she said.
While the tourism sector is rebounding well, Rutherford-Ferguson said those businesses not directly plugged in to tourism are still facing inflation problems, and even those tourism-related sectors are still dealing with inflation.
“Stakeholder engagement is key in navigating the challenges that the country is facing and constant dialogue with your stakeholders should be a regimented part of how you govern,” she said.
“No one has a monopoly on good ideas, that’s why you engage people. [You want to] make sure that you have your best and brightest around you at all times.”
Read the entire article here: https://thenassauguardian.com/chamber-chair-urges-caution-on-minimum-wage/