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News Report: Scared’ By Livable Wage Uncertainty

Written by NEIL HARTNELL, Tribune News, October 7th 2021

A Chamber of Commerce director yesterday questioned how The Bahamas will be able to afford the Government’s planned “livable wage” phase-in and VAT cut, saying: “That scares me.”

Peter Goudie, who heads the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) labour division, reiterated his previous pleas for the term ‘livable wage’ to be firmly defined given that Parliament’s opening offered no specific.

The Speech from the Throne, which typically only gives the barest outlines of the Government’s policy and legislative direction, stated that the Government will introduce more consumer protection legislation and “increase the minimum wage and phase in a liveable wage”.

No timelines, figures or other details were provided, and Mr Goudie said: “I wish somebody would explain that [the livable wage] to me because I have no idea what that means. That was part of the Memorandum of Understanding (MoU) with the trade unions and that scares me.

“The whole point of this thing is who’s going to be able to pay for it? That’s really what it comes down to, and if nobody knows what it is then they don’t know how to plan for it.” Mr Goudie’s reference to an MoU is the agreement that the Progressive Liberal Party (PLP) signed with the trade unions during the election campaign, promising a labour-friendly agenda if voted in to office.

“They can say all they want,” he added of the Government, “but if they’re not giving any details then we don’t know what they’re talking about. I just don’t know. I don’t know what they think a livable wage is and where the money is coming from to pay for it.”

University of The Bahamas (UoB) researchers, in a study produced earlier this year, pegged Nassau’s monthly living wage at $2,625 while the equivalent for Grand Bahama was $3,550 per month.

The authors, Lesvie Archer, Olivia Saunders, Bridget Hogg, Vijaya Permual and Brittney Johnson, wrote: “Our gross living wage estimate for New Providence is 26 percent lower than the Grand Bahama living wage estimate, nearly 200 percent higher than the national minimum wage, 127 percent higher than 2013 poverty line and nearly 75 percent higher than the minimum wage hike proposed by a local union.

“Our living wage estimate for Grand Bahama is nearly 300 percent higher than the living wage, 200 percent higher than the 2013 poverty line and 140 percent higher than the minimum wage hike proposed by a local union.” The Bahamas’ private sector minimum wage, last increased following VAT’s introduction in 2015, is currently $210 a week.”

The minimum wage, though, is defined differently from the “livable wage” measure employed by the UoB study. It based its work on a model employed by Richard Anker, the International Labour Organisation’s (ILO) living wage specialist, who defined a livable wage as one that can sustain a person’s “physical, emotional, social and cultural needs and that of their family beyond mere subsistence”.

Food and housing costs, based on a “nutritious diet” and “decent housing”, were factored into the calculations together with other daily living costs, while the research also drew on data from sources such as the 2019 Labour Market Information Newsletter; 2017 Labour Force Report; and 2016 Government of the Bahamas salary book.

The Government had proposed increasing the minimum wage to $250 per week when in Opposition, but Mr Goudie yesterday said such a rise would have to go through and be approved by the National Tripartite Council, which includes representatives from the private sector, trade unions and the Government.

The Chamber’s labour division head also warned that any talk of a “livable wage” could “scare away foreign direct investment” that The Bahamas needs to revive its economy post-COVID.

Pointing to already-high business costs, and multiple impediments to the ease of doing business, Mr Goudie added: “They will look at the cost of doing business, and you want to increase wages? Then we have a problem.

“Who’s going to come here if it’s too costly to do business? That’s the issue. It is so expensive to do business in The Bahamas now, and you want to keep adjusting and increasing wages? It’s going to be difficult.”

The Government also doubled down on its pledge to slash the VAT rate to 10 percent “across the board”, which prompted Mr Goudie to question whether the country could afford it given its dire fiscal position and if other revenue sources have been identified.

“I don’t know how they’re going to be able to afford to do that,” he added. “It will be interesting to know how they can afford to do that. You can’t cut things and not know where you’re going to get your money from. I don’t know, I really don’t know.”

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