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Minimum Wage Recommendations - St Lucia

Minimum Wage Recommendations - St Lucia

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Published by Bourne Lucian

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Published by: Bourne Lucian on Aug 03, 2011
Copyright:Attribution Non-commercial


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As simplistic and obvious as the question might seem at theconclusion of making certain discoveries, it is still important to askin the context of this exercise, what was the fixing of a minimum wage set out to achieve? The most simple answer would be that theCommission was assigned a task to accomplish just that, and in sodoing, has fulfilled its mandate. The aforementioned notwithstanding,there have been a wide gamut of implications and ramifications thatcannot be ignored throughout the process of problem-solving orsolution-finding. This, of course, might very well constitutethe philosophical underpinning guiding the objectives of a tacithypothesis that would set out to prove that the recommendation toestablish a minimum wage above the current threshold of earnings, where it is below the nominal rate would not produce adverserepercussions within the macroeconomic environment. So, theconcerns initially postulated by way of the Terms of Reference would,in fact take into account the effect that the setting of a minimum wage would have on business practices; investment; employment; the Treasury; and the ability of employers to pay a wage more reflective of  what the market forces would inevitably dictate. The Terms of Reference have also implicitly promoted the exercise of prudence inthe pronouncement of a new minimum wage regime by factoring inthe social impact that any such hike might necessitate.It is to be pointed out that the many theories and perceptions distilledon how utilitarian or practical a minimum wage fixing would be to aneconomy or to the eradication of poverty was not really the thrust of the investigation, or any such determination. That could not be,especially in an economy where global market forces influence macro-economic trends, especially in an environment of limited resources. Asequally interesting is what might be today's status quo mightsuddenly transform into a Cul de Sac requiring rethinking andregrouping or reengineering of its routes and processes. So it could bethat what or those who might be considered poverty-stricken nowmight very well descend into indigence when certain situations occur. The vulnerable, on the other hand, might be very well restored topoverty level as conditions internally and externally prevail. The foregoing situation is one with which any attempt at addressing aparticular standard of living has to contend. The question, thereforeas to whether the setting of a minimum wage is a panacea for those
 within a certain economic bracket or whether it would extricate themfrom poverty is as per the mandate immaterial to such polemics. As amatter of fact, nothing in the Terms of Reference provided a rationalein pursuant of the activity. However, research instituted to producean outcome could not ignore the debate abounding in a profusion of literature on the subject. While the contemporary position is that, aminimum wage regime does not engender a reduction in poverty, thatdoes not mean that a minimum wage would not at least provide amodicum of relief for the destitute. The setting of a minimum wage is perceived in some quarters, as wellto raise the unemployment index, thereby contributing to furtherdestabilisation within the workforce in an already pervasive paradigmof a lack of employment opportunities.For the employer, an increase in productivity can be manifested whenemployees express appreciation in the face of the incentive of a higher wage. The idea that raising the wage bar would drive out investmentor result in businesses folding up by way of losing profitability havebeen shown to be unfounded for the most part. While in the literaturereview, the concerns have been highlighted, the arguments againstraising a minimum wage seem negligible. The argument lodged in the foregoing was raised in a speech deliveredby the Labour Commissioner on behalf of the Minister for Labour, atthe opening of the St. Lucia Employers' Federation Minimum WageWorkshop on September 13, 2010 where he made the following
observations :-
"Naturally, the debate on minimum wage legislation has given rise to differences of opinion about the benefits and drawbacks of a minimum wage. Supporters of the 'minimum' say that it will serve to increase the standard of living of workers and reduce poverty, as it will dictate the lowest wage at which workers will be compensated for their labour.Alternatively, opponents question whether the minimum wage will be high enough to be effective and worry about  possible increases in unemployment, particularly among workers with low productivity due to inexperience or handicap, thereby harming lesser skilled workers to the benefits of better skilled workers." 
 The statement advocated that
"whichever side of the discussion that you may find yourself, I sincerely hope that you consider all the issues in arriving at a consensus." 

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