Government has been looking at a possible increase in the $12.50 an hour minimum wage, Finance Minister Larry Howai said yesterday.
Speaking at the Employers Consultative Association’s (ECA) pre-budget meeting at the Courtyard by Marriott Hotel, Port of Spain, he said: “We have done some work on that. Because of the fact that unemployment is so low it has forced wages up. So that across the board most companies are paying above not only where the minimum wage is now but where it is likely to be based on the computations that we have, because it is done on the basis of specific computations.
“And even if we use those computations we are likely to get a minimum wage that is probably below what most people are paying now. So that there will probably be some element of revision of that because it is due around now, but I don’t think that it is going to make a big difference to most employers based on the analysis that we have done. I think it may just be one sector or sub sector that might have an issue. Outside of that I don’t think it will create an issue for any other sector in the economy.”
Touching on concerns raised by the business owners, who were present at the meeting on wage negotiations and the impact on productivity because of the “standstill” that comes with such negotiations, Howai said this was a fiscal issue.
“You can only pay so much in terms of an increase and whether it is you want to give a 15 per cent or a 13 or a 12 per cent depends really on your ability to pay. So we are committed to ensuring that we settle at a level that is sustainable for the economy but at the same time recognise the fact that as the economy continues to do a bit better there is the opportunity for the government to do a little bit better, in terms of the way it will settle overall wage negotiations.”
He added that during 2013 Government settled about 83 wage negotiations and the backpay for that would have cost Government close to two-and-a-half billion dollars.
“So it is a quite a significant number for the economy on a whole and when you consider the backpay that will have to be paid as far as the negotiations with the (Public Services Association) is concerned takes us into the vicinity of four to five billion dollars and that has certain kinds of implications for all of us, because when Government pays it gets it from somewhere—which is your pockets—and therefore we have to be mindful of how we manage that process,” he said.