by Eulana Weekes
St. Kitts and Nevis (WINN): Prime Minister Dr Terrance Drew updated the public on the ongoing dialogue between stakeholders and the Government as it relates to the increasing of the minimum wage in St. Kitts and Nevis at the Prime Minister’s Press Conference on Thursday, July 13, 2023,
“The Minimum Wage Task Force was put together, and it was being led, of course, by the Ministry of Labour, where you would have brought all of the stakeholders to the table. It means, Government, Business, Chamber, and so forth, Union or workers’ organisation to discuss the issue of the minimum wage. Why is it important? It has been about a decade, and the minimum wage in St. Kitts and Nevis have not changed. So, as we call ourselves a high-income country, by the calculation of GDP and so forth, the minimum wage in St. Kitts and Nevis has not changed, which means that the economic power of our people is somewhat limited as a result of that. Of course, we encourage businesses as much as possible to pay above the minimum wage.”
PM Drew added, “So, they have met, and the discussions have been going on. We have different position papers because we have included many different ministries, organisations and so forth so that they can put the position papers forward as to what would be reasonable. We have heard from the Central Bank. We have heard from the Ministry of Finance. We have heard from the Chamber. We have heard from the Labour Union, and we have heard from the Labour Department. We have heard from Social Services, Consumer Affairs and Social Security. So we have had position papers from these stakeholder organisations, ministries or whatever they might be, and so we have reached the conclusion that there needs to be an increase in the minimum wage because we have said there needs to be an increase in the minimum wage based on where we are; and everyone has agreed. What we are discussing is, “How much, at this present moment, the minimum wage should be?” That is what we are discussing presently, and of course, we want to make sure that our people get the best deal that can be had at this particular time.”
Understanding the desire for an increase, the discussions are focused on finding a sustainable wage rate that would not negatively impact employment and the general economy of St. Kitts and Nevis, a reliable source informed WINN FM.
Meanwhile, in the public domain, individuals are arguing about the effect that a minimum wage increase can have on consumers. Some suggest an appropriate execution to protect small businesses and employment, whilst many others are primarily focused on inflation and the cost of living, which have heightened in recent weeks.
A social media commenter said, “ I really think the government has to work on increasing the minimum wage. There is no doubt about that, but that has to be increased in stages to allow the economy to adjust.”
The commenter questioned, “[Do] you know how many [people] will be laid off, and businesses can close overnight because of that? I say, work on lowering or removing some of the customs charges (Import Duty, CSC and VAT) on a wider range of goods to help; but to drastically increase minimum wage like that, would only lead to bigger problems in the long run. At first, it will feel good, but granny always says laughter comes before crying.”
The view of another commenter suggests, “I don’t think anyone in SKN should be making less than $500.00 per week. Less than that is not a livable wage, based on the cost of living here.”
A third person said, “Unfortunately, it will not have the intended effect. The supermarkets will react by simply raising prices further. It will contribute to higher inflation, unless we have some form of price control. This should really be the first step.”
From the viewpoint of another individual, “The cost of living in St. Kitts for a minimum wage worker is ridiculously high.” The commenter added, “If you have been shopping in a supermarket, you would realise that basic necessities like milk have gone up by almost 50%. You have to consider that inflation decreases people’s spending power. Inflation last year was 3.8%, the highest it’s been in a decade. And it’s predicted to rise even higher for 2023. We are going to end up with a larger working poor class if we don’t offset the cost of living with an appropriate minimum wage. The more money people make, the less the government will have to spend on social welfare programmes to help to look after their families, and they will also have more to save. Things are not getting better with the war and the slow economic recovery.”
Many people in St. Kitts and Nevis have identified items at supermarkets and wholesale suppliers where prices have skyrocketed. The matter forced the Government into dialogue with stakeholders in search of a reason for price increases.
The International Labour Organisation Global Wage Report for 2022-2023 highlighted “The impact of COVID-19 and inflation on wages and purchasing power.”
The report states, “Evidence for 2022 suggests that rising inflation is causing real wage growth to dip into negative figures in many countries.
The increasing cost of living has the greatest impact on lower-income earners and their households. This is because they spend most of their disposable income on essential goods and services, which generally experience greater price increases than non-essential items. Inflation is also biting into the purchasing power of minimum wages. Despite nominal adjustments taking place, the real value of minimum wages is quickly eroding in many countries.”
The International Labour Organisation identified “minimum wages and social dialogue as keys to maintaining wage workers’ living standards.”
“There is an urgent need for well-designed policy measures to maintain the purchasing power and living standards of wage workers and their families. Adequate adjustment of minimum wages could be an effective tool, given that 90% of ILO Member States have minimum wage systems in place. Strong social dialogue, including collective bargaining, can help to achieve adequate wage adjustments during a crisis.”
St. Kitts and Nevis has one of the highest standards of living, minimum wages and average wages in the OECS.
Currently, the National Minimum Wage is calculated by a minimum wage rate of $9.00 per hour. When multiplied by 40 hours per week, an employee is subjected to a weekly payment of at least $360.00. No worker in St. Kitts and Nevis should be paid less than the mandatory minimum rate of pay. Before November 1 2014, the weekly payments were $320.00 per week at a minimum wage rate of $8.00.