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BCCI and NTUCB agree on need for Minimum Wage formula

“The BCCI’s position is that we endorse and support the fact that there need to be adjustments [to the minimum wage] to ensure workers have a livable wage. …the BCCI’s position has been that a livable wage is necessary.” This is how the Belize Chamber of Commerce and Industry (BCCI)’s Immediate Past President and Executive Council member Marissa Longsworth summarized the business support organization’s position on the topical matter of the increase to the minimum wage.

Longsworth, speaking on the Chamber’s weekly program, “The Business Perspective,” explained, “We don’t have any objection to an increase in the minimum wage. That is a straight statement there that I stand behind, and I know that the Executive [Council] stands behind. Our concern more has to do with the mode of increase and how quickly that increase occurs.”

Also on the Tuesday, June 21st, Business Perspective Show was the President of the National Trade Union Congress of Belize (NTUCB) Luke Martinez, who underscored the unions’ position on the minimum wage. “The NTUCB’s has always been for a higher minimum wage. …Of course, we agree that it cannot be something that is going to be fast.”

Martinez would go on to explain that the unions believe that had there been incremental increases since 2012, the conversation at present would not have been about a more than 50 percent jump from $3.30 to $5.00, but rather it would have been for much less.

Both the BCCI and NTUCB representatives underscored the importance of the change to the minimum wage by adopting a “Balanced and Evidence-based Approach.”

Longsworth, for her part, said that the BCCI supports such a balanced approach, and it is necessary for all stakeholders to find the appropriate middle ground. Martinez stressed that a balanced approach is indeed necessary, and must ensure that the policy change does not tilt too much in favor of one side over the other.

Minimum-Wage Adjustment Formula

At the heart of the conversation with Longsworth and Martinez was the articulation of the BCCI’s and NTUCB’s position of the need for a minimum-wage-adjustment formula (“MW formula”) to guide the process.

Speaking on the value of an MW formula, Longsworth, said, “From the employers’ perspective, it would, of course, bring predictability. …it would bring stability, as it would allow [employers] to plan.”

Martinez, for his part, reiterated: “If a formula was used back in 2012, we wouldn’t be in this position.”

The parties appear to view the formula-based approach to be more aligned with the International Labour Organization (ILO)’s policy advice regarding minimum wage uprates. The ILO, in its Minimum Wage Policy Guide, wrote:

“Many countries have discovered that a gap exists between the legitimate needs of workers and their families and what the economy is capable of paying in terms of minimum wages. It will not be possible to eliminate this gap in a single minimum wage adjustment, at least not without adverse economic effects. This suggests that there should be a medium- to long-term target for this policy – that is, closing this gap in successive, gradual adjustments.”

The Employers’ and Workers’ representatives both agreed that there is a need to be circumspect in the speed of the increase, so as to mitigate adverse economic impacts. And the parties explained that while there is still room for debate on the variables that should be included in the MW formula for Belize, there is general consensus that the formula-based approach is a key means through which to help balance the needs of workers and firms, while simultaneously taking the “gap” referred to by the ILO in the immediately preceding quote above.

Examples of such formulas could be found in countries like Brazil and Costa Rica that look at inflation and economic growth. In Malaysia, their version incorporates variables such as productivity growth, the poverty line, and more. It would be up to Belize’s tripartite stakeholders to determine which formula works best for the country’s specific context.

The Minimum Wage Convention

The variables to be chosen for Belize’s MW Formula would likely be pulled from Article 3 of the ILO’s Minimum-Wage Fixing Convention (1970), which states:

“The elements to be taken into consideration in determining the level of minimum wages shall, so far as possible and appropriate in relation to national practice and conditions, include:

“(a) the needs of workers and their families, taking into account the general level of wages in the country, the cost of living, social security benefits, and the relative living standards of other social groups;

“(b) economic factors, including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment.”

Here the convention likewise seeks to balance the needs of workers and economic factors. As it relates to the “desirability of attaining and maintaining a high level of employment,” it becomes necessary to include metrics for enterprises’ ability to pay the increased minimum wage, without feeling it necessary to reduce hours or staff

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