Minister of labour and social security Pearnel Charles referring to Jamaica’s minimum wage has pointed out that “the 17 and a half percent increase in 2008 saw a number of workers loosing their jobs”. The increase was from $2800 to the present $3700. It is a fact that many workers lost their jobs and many remained unemployed and what the government and the decadent unions are engaged in is legislating poverty, global uncompetitiveness, unemployment and the destruction of businesses, especially small businesses which continue to be the engine of growth in Jamaica.
A minimum wage should not be made into law and at least be abandoned until the economy begins to grow again in double digits. A better way is to recommend a minimum wage but not have it as a big stick over employers where if the employer and an employee agree to an affordable and acceptable wage they will not be prosecuted as it must be pointed out that the law of the land takes precedence over any agreement between employer and employee.
If you are a retailer of goods and your mark up is 20 per cent and you pay your worker $3700 per week you must invest in $18,500 worth of goods to mark up and sell for $22200. I am no economist but when you add the cost of ever increasing goods, utilities, money, security, maintenance, taxes and bureaucracy, if you must borrow that money at an average of 25 per cent p.a., that worker may cost a small business in excess of $1.2 million annually. Businesses will be forced to employ and keep only workers that can add value and earn their salaries. Any business that does not recognise that fact will ultimately be engaged in creative self destruction.
Free market forces should be allowed to work, or at least private treaties between employee and employers should be allowed legal status without punitive action being threatened. If this is done, it would have a significant impact on unemployment, crime and other social ills.
The unions, government and people must begin to think, speak and act honestly. These are trying times and all of us will sink, swim or drown together. According to the president of the National Worker’s Union, Vincent Morriso, “you can’t have inflation moving in one direction and wages moving in another direction”. This is a perfect prescription to drown together as higher wages in a no growth economy further drives inflation and crime even faster deepening the workers’ predicament with higher prices for everything in sight.
The focus should be on getting new investments, putting more people to work and not making the Jamaican worker less competitive globally bearing in mind that you can get more than five Asians for the same minimum wage.
Michael D Spence, Kingston, [email protected]
