DA­REECE PO­LO

Se­nior Re­porter

da­reece.po­lo@guardian.co.tt

Gov­ern­ment’s move to raise the min­i­mum wage by $3 from Jan­u­ary 1 was a re­spon­si­ble one, says Labour Min­is­ter Stephen Mc­Clashie who de­fend­ed the in­crease from $17.50 to $20.50.

In his con­tri­bu­tion to the bud­get de­bate yes­ter­day, Mc­Clashie said the in­crease was care­ful­ly thought out in the best in­ter­est of the na­tion­al work­force.

“The in­crease was not pulled out of a hat but was based on a rec­om­men­da­tion from our min­i­mum wage fix­ing ma­chin­ery – in this in­stance the Min­i­mum Wages Board,” he said.

He said while Op­po­si­tion Leader Kam­la Per­sad-Bisses­sar want­ed a $25 in­crease and some trade unions re­quest­ed as much as a $30 hike, that was not fea­si­ble and would have put the Gov­ern­ment un­der in­creased pres­sure to in­crease salaries across mul­ti­ple sec­tors.

“This, Madame Speak­er, would have cre­at­ed sig­nif­i­cant pres­sure and de­mands for wage in­creas­es in en­try-lev­el po­si­tions as well as low and se­mi-skilled work­ers. Some mid­dle-lev­el po­si­tions would now find their re­mu­ner­a­tion pack­age in close prox­im­i­ty to the min­i­mum wage. Con­tract work­ers would in­crease their wage de­mands even though they ex­ist in high­er brack­ets cur­rent­ly in or­der to main­tain the dif­fer­en­tials,” he said.

Mc­Clashie said gov­ern­ment em­ploy­ees would have al­so sought wage hikes, which would have put added pres­sure on Na­tion­al In­sur­ance Fund re­cip­i­ents who would like­ly want more mon­ey.

More­over, he said, many busi­ness own­ers would have been forced to fire staff as an em­ploy­ee mak­ing a min­i­mum wage of $30 an hour would cost their or­gan­i­sa­tions at least $2,000 more every four weeks. He said this would have in­creased op­er­a­tional costs ex­po­nen­tial­ly.

“Imag­ine a busi­ness place that has con­tributed to the com­mu­ni­ty by em­ploy­ing ten young per­sons. This means an ad­di­tion­al $20,000 has to be found. The log­i­cal ex­pec­ta­tion would be that should the busi­ness be un­able to with­stand this shock, they will re­duce staff and in­crease the work­load on those that re­main. The al­ter­na­tive for many busi­ness­es may not be bright and they may ac­tu­al­ly have to close down al­to­geth­er,” he said.

“The de­ci­sion of $20.50 is re­spon­si­ble from the per­spec­tive of eco­nom­ic re­al­i­ties. There are sec­tors that can af­ford to pay per­sons more but there are many sec­tors that sim­ply can­not af­ford it. The de­ci­sion would re­sult in an out­come that on the face of it seems to have the work­ers in mind yet, in re­al­i­ty, be­cause of the ex­pect­ed job loss­es, works against work­ers’ best in­ter­est,” he added.