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Minimum wage under review

Published:Wednesday | February 24, 2010 | 12:00 AM

While the Government has made it clear that public sector workers will get no increase in salaries for two years starting in the 2009 financial year, the Minimum Wage Advisory Commission, which advises the labour minister on the basic level below which it is illegal to remunerate the lowest paid categories of workers as well as industrial security guards, has set the wheels in motion to review the legal pay floor.

But labour minister, Pearnel Charles, is keen to point out that the review was standard procedure and was not indicative of any intention by the Bruce Golding-led Government.

"The Commission is required to do a review (each year)," he told
Wednesday Business
this week.

An advertisement was placed in the press recently inviting submissions from the public on the matter. Submissions are to be sent to the commission by April 1.

Pressed whether the review was indicative of a further lifting of the legal minimum wage levels, Charles was tight-lipped.

"I will not say anything on that matter until the commission submits its report. That would be undermining the Commission," he said.

Danny Roberts, a trade union representative on the commission, said there is no doubt that the minimum wage, which is now $4,070 per week for a 40-hour workweek and $6,050 per week for industrial security guards, needed to be increased.

"Remember that part of the Government's strategic medium-term plan is that every effort must be made to protect the very weak and vulnerable," Roberts said, advancing the wage lift position.

"An increase is an absolute necessity at this time in order to prevent more and more people from sliding across the poverty line," he argued.

Sympathetic employers

And in what appears to be a growing acknowledgement of the negative cost-of-living effect on the lowest wage earners, even the umbrella employers' group appeared to have softened its previous apprehensions about a minimum wage increase.

Wayne Chen, Jamaica Employers' Federation (JEF) president, said he supported a review of the minimum wage, which was increased by 10 per cent or $74 per day in the last review a year ago.

"While it is necessary to review the minimum wage, we have to look at two factors - the increase in the cost of living and how it directly impacts the lowest wage earners, and at the same time the effects of the 25 per cent increase on the social safety net," he said in apparent reference to higher government welfare spending.

Chen cautioned that whatever increase might be awarded should be guided by all the objective factors.

"We have to be mindful that in the short and medium term, there will be tremendous pressure on the private and public sector to cut jobs," he said.

"So we have to be careful that whatever increase we come with does not become a disincentive to creating more jobs."

Roberts was, however, dismissive of this position.

"There is this thought that wage increases would lead to unemployment, but there is no study to show that. I am quite dismissive of this argument because the facts do not bear that out," the union leader said.

Roberts, the president of the Union of Clerical, Administrative and Supervisory Employees, an affiliate of the National Workers' Union, maintained too, that it was long overdue for a template to be developed for the review which would incorporate inflation and what he described as the pay levels society could afford.

"We need to fix the minimum wage so that it takes into account what is a liveable minimum wage and the level at which the society can absorb the level of increase. Then we must find ways of adjusting the wage due to inflation."

Roberts said this model would have to be influenced by productivity.

Meanwhile, the advisory commission's secretary, Marcia Sewell, said following submissions from the public by April 1, a consultation would take place and the commission would then make its recommendations to the minister of labour and social security