While revealing that an advisory committee has been assigned to review the territory’s minimum wage, Labour Minister Lorna Smith has stated that the government cannot predetermine what the new amount will be.
The minimum wage was last increased on 1 October 2016, from $4.00 per hour to $6.00 per hour. But a 2022 review of social sssistance in the Virgin Islands, conducted by the Social Policy Research Institute, observed that the minimum wage is well below what is now needed to survive in our territory.
And since the COVID pandemic and the inflationary conditions that came afterwards, there have also been increasing calls for employers to bump the minimum hourly rate at which workers are paid. Residents have also given varying suggestions of what the new minimum wage should be.
But speaking at a recent press conference, Minister Smith cautioned that the new amount can only be determined after the in depth study is done by the committee and their recommendation is approved by the government.
“Let me be careful in saying it’s not an easy issue. I was very deliberate in talking about a review because you have to weigh different factors and we don’t know where it’s going to come out. But once it’s accepted by the government, we expect it to be enforced,” Minister Smith said.
Pressing for a more straightforward response, a journalist asked them to clarify whether residents should look forward to the minimum wage raising next year.
Minister Smith said: “When I say it’s a review, I mean you have to weigh different factors. I have no doubt nobody can live on $6 an hour – I don’t even know how many people are being paid that. But we want to look at all the factors, how it would impact the wider economy, the taxation issues and so on.”
Minister Smith added that the government is conscious of the many economic challenges residents are currently facing.
“We must all put our shoulder to the wheel — government, employers and employees to ensure that individuals on low incomes do not bear a greater share of the burden than they should,” she said.
She also promised that the review will be comprehensive, transparent, and involve the expertise of a diverse range of stakeholders to ensure inclusive participation and perspective. Importantly, the ad-hoc Committee will report by the end of March 2024.
The committee will also have access to technical support from economists, statisticians, financial analysts, and other government officials and development partners. This expertise will support the reviewers in assessing and analysing complex data, develop and evaluate policy options, and make informed recommendations.
The Committee is expected to complete its review and submit its final report to me as the subject minister within four months of its inaugural meeting, which is scheduled for late November.
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