“It’s a question of timing” – PSC Chair says “not opposed” to increase

Private Sector minimum wage

…as GPSU calls for immediate pay hike

Chairman of the Private Sector Commission (PSC) Nicholas Boyer has acknowledged that the current Private Sector minimum wage is not a “livable wage” but he argued that the business community’s ability to facilitate an increase is a “question of timing”.

“It’s gonna 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 said when contacted by this publication on Tuesday.
Last month, 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 objections to the increase.
According to the PSC Chairman, the Private Sector is currently divided on the issue, but he personally believes that the minimum wage increase should be mandated in a post-COVID-19 world.
“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,” he explained.
“There’s lots of people in the Private Sector who disagree with me…the Private Sector is very well split between those who are in favour of making increase now and those who want to hold off,” Boyer added.
When asked what kinds of businesses are in favour of putting off the minimum wage increase, Boyer could only say “mostly those who want to hold off are in vulnerable positions” and that increasing their payroll at this time would push them into a very “untenable situation”.
In further outlining why an increase at this time is now the best route to take, Boyer highlighted that price has an inverse relationship to demand, and therefore “as you increase price, people demand less of the item”.
Similarly, he posited that “When you have a minimum wage, it’s a floor, not that everybody gets paid the minimum wage but it’s a floor for the lowest wage possible you can pay. Once you increase that, you are going to have less labour demand. It’s very simple; businesses are going to look at what their sales are, they’re going to say they want their payroll to be a certain percentage of their sales and if their payroll costs them more, they’re going to adjust their payroll either by adjusting the hours persons work or by reducing the number of staff…That is how businesses work.”
He also contended that another issue is the lack of data on how businesses and Private Sector employment were affected by the pandemic.
“The issue here is…when you listen to the US news, they can tell you what their payroll report is, how much jobs were gained or lost…they can tell you things like average salary and number of hours worked. Do we have that data or are we just talking out of our mouth?”
But even as the PSC Chairman made these arguments, the Guyana Public Service Union (GPSU), believes that a hike in the minimum wage is long overdue.
In a statement on Tuesday, the trade union organisation called on the PSC to immediately facilitate an increase.
“While the GPSU agrees that the economic situation was tenuous, employers in the Private Sector should make every effort to recognise the meagre wages paid to Private Sector employees and endeavour to lift these employees out of the suffering by implementing the increase. The increase is well deserved and should have been implemented years ago,” the Union said.
Under the A Partnership for National Unity/Alliance For Change (APNU/AFC) Government, a tripartite committee was responsible for reviewing the matter of increasing the Private Sector’s minimum wage.
The committee had recommended an increase to $60,000 from the current $44,200 per month. In January 2017, the Private Sector’s minimum wage was increased from an hourly rate of $202 to $255, taking the monthly wage from $35,000 to $44,200. The Public Sector minimum wage currently stands at $70,000.
The PSC Chairman said the business community’s position has not yet been officially communicated to authorities at the Labour Ministry. Boyer indicated that this will be done when the tripartite committee meets again to further discuss the matter. (G11)