ECA examining minimum wage issue

RONALD RAMLOGAN, CEO of the Employees Consultative Association (ECA), said on Friday his group is actively engaging its membership to seek their perspectives on the issue of the national minimum wage and its impact on companies across the board ranging from micro businesses to big businesses.

Newsday had sought his response to the Prime Minister's promise at Thursday's post-Cabinet briefing to examine the minimum wage level, now at $17.50 per hour.

Ramlogan said, "In principal we are not opposed to an increase in the minimum wage."

However he said the ECA must consider where things stood now, post-pandemic, with all related impacts such as inflation, the cost of living and certain costs to businesses such as heightened shipping freight charges.

"Within that context, we are not opposed to an increase." He said a wage is related to improved living standards and to the concept of decent work.

"It is also important to emphasise we'd also continue to support the ideals of a skilled and productive labour force in a highly competitive environment, including an enabling business environment, which are important drivers for enabling living standards to be achieved and more importantly to be sustained."

Ramlogan said TT has long had a Minimum Wage Board which sets a minimum wage level by considering many factors.

"If those factors are not properly balanced that can have far-reaching implications."

He noted that any hike in the minimum wage would be applied to all companies across the board regardless of size.

"Those implications for businesses, especially small businesses with limited fiscal space, we have to be particularly careful about." He said even job-seekers should mull the size of any increase in the minimum wage, if it makes some companies become reluctant to hire new staff.

Ramlogan said those charged to set the minimum wage must consider such a balance.

The process, he said, must include government, business and labour, and the ECA would be willing to participate in such a dialogue.

He said some countries have a fixed, periodic manner of increasing the minimum wage level. Although this does not pertain in TT, he said businesses are better able to manage their costs when they knew of changes in advance, to make business changes to cope.

"It might be time to consider whether we need to have a fixed period of increases, maybe every two or three years, I don't know, as the case may be, based on those variable factors that go into the minimum wage."

Newsday asked how prevalent was the minimum wage as a level of actual wages given by employers.

He replied that preliminary details from an ongoing ECA survey in which ten per cent of members had submitted replies had so far found that the lowest wage actually paid by companies was about 47 per cent higher than the official minimum wage of $17.50.

Newsday asked if this meant this whole debate was purely academic, or whether a minimum wage level was useful as some sort of benchmark/reference point.

Ramlogan replied, "That higher effective minimum wage is just an average. You'd also have to consider that our membership spans the full spectrum of business sizes. "We have companies with two employees; we have large multinational organisations."

He viewed $17.50 as a guide. "I think of it more as a baseline.

"We have no issue in having at least some minimum standards for work."

Ramlogan said a minimum wage level was a very important issue and helps curb exploitation.

"Those things are things we need to be careful about.

"So I think there is still relevance to having a minimum wage.

"That is why is is important to have that continuous mechanism for reviewing and periodically increasing the wage, as our realities change in the country."