Minimum wage increase could cause rise in jobless

THE PROPOSED minimum wage increase from TT$8 to TT $9, in the Government’s “middle of the road Budget” could see a number of people facing unemployment and an increase to the country’s unemployment rate, according to the President of the San Juan Business Association Gail Merhair. Commenting on the initiative, Merhair said the increase could lead to a 12? percent increase in wages across the board, which represents an approximate annual increase of over $20,000. This figure she said, was dependent on the number of employees working at an establishment. Merhair explained that an increase in the minimum wage could also cause the price of goods to go up, as businesses try to absorb the additional cost to wages. She said other costs that could be adversely affected are security, transportation and raw materials.

Merhair said she believed the Prime Minister should have consulted with the business sector before announcing such an initiative. What was liable to happen, she stated, was that the very thing he was trying to prevent may happen anyway, and an increase may be seen in the unemployment level, as businesses struggle to cope with the increase in 2005. She also stated her organisation was concerned that the increase in the minimum wage would have an effect on inflation and may cause it to go up, noting that a reduction in the surcharge on the “import of turkey and chicken parts did not tackle inflation.”

On the issue of the minimum wage increase, President of the Trinidad and Tobago Chamber of Industry and Commerce, Christopher Mouttet said that the Chamber was not surprised by the increase, since it was indicated for quite some time that the projected figure is $10 per hour. He noted that this was always an area to be cautious about, since inflation could increase. He also noted that while the levy for smaller businesses would absorb some of the overhead expenditure, this should be applied to all businesses since the increase would push overhead costs up in medium and large businesses. President of the Trinidad and Tobago Manufacturers’ Association, Anthony Aboud, said the organisation was philosophical about the minimum wage increase, since there were a number of manufacturers whose wages already exceeded that figure.