Wage increase puts housing at risk

President of the Trinidad and Tobago Contractors Association (TTCA) Hugh Schamber has warned that government housing will be in jeopardy if the 100 percent increase in the minimum wage proposed for the heavy construction section is implemented.

Querying how Government intends to achieve its planned 10,000 houses a year if construction costs soar 30 percent, he noted that this was the pull on the labour cost in the other industries, arising from a projected $32 to $38 per hour minimum wage being proposed by the Minimum Wage Board for the heavy construction sector. The other business sectors are unlikely to escape, he maintained. Schamber said, “all construction, agriculture, manufacturing, public servants, retail banking, education programmes, new schools, new teachers; all of a sudden everyone would want double. How do you sustain it? As a country we can’t. We don’t sell enough oil and gas to do that.” He pointed out that 22 percent of the country’s work force was employed in construction and quarrying, and increases in the cost of construction could go up 30 percent if this proposal becomes legislation.

Another fallout, he believes, will be on small and medium business, which he called “the engines of employment and wealth generation.” “Aren’t these the very industries you are hurting with this type of legislation?” he asked. He further questioned how a policy of full employment balanced with these high-rise minimum wage objectives, which he maintained, are something that the Government should not get involved in. Government, he said, has a role to play in providing a social safety net for basic welfare, and it ought not to seek a minimum wage in the heavy industry sector especially as they are regulated through collective bargaining agreements and are already at a premium when compared to national levels.

Speaking on behalf of the Employers Consultative Association of which he is Chairman, Dane Darbasie said on Friday that any such wage increase in the heavy industry sector would not operate in isolation, but would have seismic effects on the country’s overall wage structure. Labour costs would damage the ability of TT to compete, and there would also be a corollary effect of inflation, he said. The Chairman went on to make the point that the minimum wage was not a profit sharing system. The intention of a minimum wage, he maintained, was to protect people at the lower end of the pay scales so that their basic commitments can be met. A single, economy-wide minimum wage suffices; and in sectors that can bear much higher wages, market forces and the negotiation process, are competent to set wages in those sectors. Darbasie said that it was highly debatable and questionable for higher minimum wages to be legislated for those sectors that are already paying more than the legal minimum wage.