SIR,
The government of Saint Lucia has promised to raise the minimum wage of the workers in this country with effect from August 1st 2024.
The Prime Minister who is also the Finance Minister announced in his budget presentation that the Minimum Wage Commission had made its recommendations. He also stated that these recommendations have to be published in the GAZZETTE and the public in general have 21 day to make objections, suggestions etc He invited all the stake holders, NWU, Business Owners, CSA and other organisations, to give their input on the recommended raise in wages.
Now, I want to share my opinion on the impact it would have on the following areas of Commerce- Taxes, NIC, Consumer Goods and services to name a few.
Businesses big or small will not compromise on their profit margins. So here are the things that businesses might do to keep their PROFITS INTACT.
a) Reduce the number of hours they operate. ( Man Hours)
b) Increase the prices on goods and services which the government cannot control once these items do not fall in the price control list.
c) Reduce the number of workers in their companies or businesses.
d) Shutdown branches.
e) Hire part time workers and pay them in cash and cook the books with fictitious expenses.
When businesses are asked to comply with these changes, they have to pay higher salaries and higher NIC contributions which eat into their profits. They still have to pay taxes whether Customs, Excise, VAT or Corporate Tax.
From the point of view of workers, a hypothetical projection is as follows:
Rate per hour at present – $3.75.
8 hrs @3.75 per hour = $30 per day.
So a worker earns between $600- 750 a month.
Starting from August this year a worker’s wage would be raised to $5.00 per hour.
8 hrs @ $5/- per hour = $ 40 per day.
So a worker earns between $800-1000 a month.
The Government can afford the increase in minimum wage for its employees because these amounts are and can be recovered through the various taxes it imposes on the citizens and tourists.
Who is really going to benefit from this change in minimum wage structure? The Government Employees (Both public and civil Servants ) and even in the Private Sector, pay scales are a lot above the minimum wage requirements. These are the people who pay Income Tax and other taxes. In principle, people who earn less than $500 or $1000 per month will be the beneficiaries. But my Question to you is this: These very people who are called marginalised are reaping a whole lot of GIFTS from the Government in the form of Bursaries, Free Transport, Meals, Free Laptops, Free Internet for their children. A price should be put on these items and be converted into cash projections to determine the real income of these people. What is their real income? If most things are given to them for free, when will almost all the people in Saint Lucia learn to value their blessings. Rich, Middle Income or Poor.
I am the happiest person on this earth that the minimum wage in Saint Lucia will be raised from August. A serious request to the Government of the day. Please stop/pause and educate the populace on saving, budgeting and prioritising their needs.
A Concerned Citizen