Business Senator: 'Size and timing of Minimum Wage increase matters'

By Michelle Sutherland

The idea of a minimum-wage increase is commendable but it is imperative for the government to consider the timing, Business Senator Kevin Herrera told The Reporter.


Herrera underscored the fact that the private sector is still only recovering from the steep recession triggered by the pandemic, and is currently faced with heightened input costs. "Freight cost, the cost of other products like wheat, and all that type of thing that is going up," he said. "When you add that minimum wage, it compounds an already bad situation."


The business senator expressed concern regarding when and how fast the change would be made. ''It is the timing of it or how it is being done," Herrera explained. "The rising fuel prices are specifically affecting the productive sector, more importantly, the farming sector, which will probably be one of the sectors that will be more affected by the wage adjustment."


The business senator shared his view that perhaps the government would need to be a little more careful in terms of the timing and should possibly try to introduce the wage increase incrementally.


According to Deputy Prime Minister Hon. Cordell Hyde, an increase is scheduled for July 1st, 2022. Speaking roughly one hour and a half into the March 24th Sitting of the House of Representatives, Hyde proudly announced, "The long-awaited adjustment to the minimum wage will take place this year [on] July 1st! No more starvation wages for workers!"


It is important to note that Hyde did not specify the size of the increase in his comments in the House of Representatives. However, given the pre-election promise by the People's United Party (PUP) to raise the minimum wage from $3.30 to $5.00 an hour, many have interpreted Hyde's words as referencing the full, more than 50% increase to the minimum wage as of July.


It is worth highlighting, however, that it is possible that Herrera's suggestion for an incremental implementation strategy could likewise be on the table.

According to Herrera, while he is of the view that the changes to the minimum wage will not have an adverse effect on certain sectors such as the BPOs, banking, tourism among others, there are those such as small businesses that had to take out loans from the bank to keep their employees and their doors open during the pandemic. Herrera said that majority of those businesses are still paying off their loans and so an additional expense to them could result in some workers being let go so that employers could cover their costs. Due to this Herrera noted that he thinks that it is important that there be a dialogue between the private sector and the government in an effort to ease the burden and find a viable solution. ''I think that overall the initiative is good, because, as I said, you want to address the living wage for people," he explained. "But you just want to make sure that it is affordable and the timing is right and how it is being implemented is not too burdensome.''

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