The illusion of employment

Employment in TT returned to the local agenda last week in the wake of the government's decision to increase the minimum wage from $17.50 to $20.50 an hour.

Progressive Democratic Patriots political leader Watson Duke, a former Public Services Association president. noted that the increase would result in a salary of just $3,600.

In 2018, Dr Surujrattan Rambachan noted the CSO's report that 77 per cent of the workforce earns a salary of less than $6,000. An estimated 30 per cent of the workforce earns the minimum wage.

The other acknowledgement of the dismal reality of local incomes in the 2023 budget is an increase in the tax exemption for individuals to $7,500 per month.

The Employers Consultative Association saluted the minimum-wage increase and the commitment to pay $1 billion in back pay to the 37,000 public-sector workers who accepted the four per cent wage offer.

But the ECA also noted the 3.7 per cent unemployment rate —“half that of a decade ago”– but expressed a concern about potentially higher levels of underemployment.

It's a nuanced observation. Underemployment happens when workers either do not work in full-time or regular jobs or at tasks which don't make full use of their training or abilities. Underemployment rarely pays an adequate salary.

State work programmes have been a troubling element of governance for decades, nominally to fuel government development projects, but also creating a system of political .

Since 2002, that tradition has been upheld by the Cepep company, originally created to encourage entrepreneurial training and opportunities. Cepep has long been unmoored from its entrepreneurship mission and its services rarely rise above make-work.

Then, with the onset of covid, the Cepep company sent home its field staff, some 10,000 workers, many of them single, unwed mothers of middle age.

Things aren't much better for small businesses and entrepreneurs, ostensibly the most important sector for TT's economic growth.

The Finance Minister reported that 72 per cent of TT businesses do not have a business bank account, 88 per cent do not accept digital payments and 55 per cent of the population are unable to use mobile or online banking.

Despite his fretting, nothing will change without competition or alternatives in that sector.

The minimum wage increase is a solid, if overdue first step, balancing the economic see-sawing that would have followed a larger increase with one that brings real-world improvement to the neediest workers.

The Scale-Up project being undertaken by the Unit Trust Corporation in collaboration with the Trade Ministry, which targets SMEs, is another.

But real change will only come through education and training, improving the capabilities of workers to meet the reality of the modern workplace.