Minimum wage can stifle innovation
THE EDITOR, Sir:
The earlier the prime minister learns that the National Minimum Wage serves to impede our working people's journey to 'prosperity', the sooner he may have to revise the blueprint to expedite full economic expansion and employment opportunities in the private sector.
The purpose of the first American minimum-wage law was twofold:
First, it served to protect workers from abuse by their employers. Second, it was formulated to ensure fair competition by requiring that all businesses play by the same rules.
During the 1970s, then prime minister, Michael Manley, introduced the Jamaican minimum-wage law. He argued that there was too great a disparity of wealth, and his mission was to build an egalitarian society. The law was intended to lift the poor. However, it was applied universally and indiscriminately to every sector in the economy and, in a short time, it killed many small businesses.
The adverse effects of this law is that it hurt the people it was intended to help.
First, existing employers are unwilling to expand their businesses because there is little profit after overhead expenses and payroll deductions. Realistically, the minimum wage ravaged the nation's thriving entrepreneurial middle class.
The second is a consequence of the former: The minimum wage discourages initiative and stifles innovation.
GLEN GEORGE WILSON
Springfield, St Elizabeth