Finding the right balance

There has been much public discourse recently about the need to raise the Private Sector minimum wage and to bring it in line with what obtains in the Public Service. In fact, for years now, many have been complaining that the wages and salaries being paid by private companies, especially in the retail sector, are way below par, and cannot sustain or meet the expenses of workers.
The Guyana Public Service Union (GPSU), in particular, recently issued a statement calling for a hike in the minimum wage, but did not take into consideration the challenges being faced by businesses in a COVID-19 environment.
Labour Minister Joseph Hamilton had announced that he would be issuing an order to increase the Private Sector minimum wage from $44,200 to $60,000 for a 40-hour week. At the time, the Labour Minister had explained that the stakeholders involved – including the Private Sector – had no objection to the increase.
Some have since expressed the view that the business community many not be able to facilitate such an increase at this time, considering the present state of the local economy.
It should be stated that no one has ever been opposed to the view that the Private Sector should raise wages and salaries. However, one has to take into consideration that some private businesses are barely managing to sustain themselves. Over the past few months, many of them were forced to close their doors due to poor sales etc. To make it mandatory at this time for such businesses to pay increased salaries would put an additional burden on them, and may even result in job losses, as businesses many be able only to keep a reduced number of employees.
On his part, Chairman of the Private Sector Commission (PSC), Nicholas Boyer, has acknowledged that the current Private Sector minimum wage is not a “livable wage”, but noted that the business community’s ability to facilitate an increase is a “question of timing”.
“It’s going to depend on a lot of factors…As long as we have the ability to pay increased minimum wages without having job losses, we definitely should increase the minimum wage,” Boyer was quoted by this newspaper as saying recently.
Boyer added, “My estimation of that would be in a post-COVID scenario once we’ve gotten vaccines distributed…once we’ve removed the lockdown orders due to COVID and we’re in a scenario where you have vaccine distribution and people no longer have to be concerned about COVID.”
That said, a detailed study is needed to gather useful information on the impact of the virus on businesses, especially small and medium-scale, many of which were forced to cease operations. This would assist policy makers with the necessary guidance to design and implement certain measures to assist those affected. Almost every sector, including tourism, manufacturing, services, retail, financial etc, have been, and will continue to be, severely affected due to the pandemic. This level of uncertainty would be eased only once this country begins to administer the COVID-19 vaccine and persons feel safe to venture out again.
Also, an analysis is needed to determine the real impact of the pandemic on the employment sector; more particularly, to find out how many persons have become jobless, how many have had their hours of work reduced, and how all of this impacted households. Prior to COVID-19, we had already seen the laying off of thousands of workers in the sugar belt by the APNU/AFC Administration. Those workers were already facing extremely tough times, as there was no system put in place to cater for the accompanying economic and social problems due to the closure of the estates etc.
We share the view of the PSC that there is need for the Private Sector minimum wage to be increased, but this must be mandated only in a post-COVID-19 environment in which the business community is performing better. While workers are very much deserving of such an increase, it is crucial that the authorities work to find the right balance before such a move is made.