Minimum Wage increase lower than Advisory Committee’s recommendation
The recently announced minimum wage increase, set to take effect in November, is slightly lower than the amount recommended by the Minimum Wage Advisory Committee.
The committee, commissioned last November to review the territory’s existing minimum wage, had proposed an increase from $6 to $9 per hour. However, the government has settled on a rate of $8.50 per hour.
After conducting a comprehensive review of socio-economic conditions, labour market dynamics, and extensive stakeholder engagements, the advisory committee’s report deemed a $9 per hour wage to be a moderate increase with minimal risk. They warned that a higher increase could potentially cause economic disruption despite benefiting minimum wage workers. Nonetheless, the government decided to reduce the proposed increase by 50 cents.
The $9 per hour recommendation was one of seven main proposals made by the advisory committee. The other recommendations include:
- Regular Review Mechanism: Establishing a mechanism for regular reviews of the minimum wage to ensure it aligns with economic conditions and cost of living changes.
- Sector-Specific Strategies: Developing tailored strategies for sectors significantly impacted by minimum wage increases, such as tourism and retail.
- Support Measures for Small Businesses: Introducing measures to help small businesses adjust to increased labor costs without reducing their workforce.
- Training and Development Programs: Investing in programs to enhance worker productivity, thereby supporting higher wages and contributing to the overall competitiveness and efficiency of the local economy.
- Monitoring and Evaluation Framework: Implementing a comprehensive framework to assess the impacts of the minimum wage increase, providing valuable feedback and data to guide future policy decisions.
- Five-Year Review: Conducting another review of the minimum wage within the next five years.
The advisory committee did not recommend increasing the income tax threshold, despite stakeholders’ calls for such an adjustment. Since the government’s announcement, there have been questions about why the income tax threshold was not also increased.
Stakeholders had proposed to the advisory committee raising the tax break threshold from $10,000 to $15,000 for minimum wage earners to provide additional disposable income and alleviate financial burdens. However, the committee noted in its report that further analysis would be needed to understand the full implications of such a change.
When BVI News questioned Deputy Premier and Minister for Labour & Financial Services Lorna Smith about the possibility of increasing the tax exemption threshold, she directed our news centre to the published report.
Meanwhile, Smith also announced measures to support small businesses, including government grants and bank loans, to help prevent layoffs due to the wage increase.
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DELILAH CANT BE TRUSTED
So, we have a committee to advise the Minister on what to do, but the Minister didn’t take the committee’s advice? Where did the advice she followed come from? What was the purpose of the committee? More illusions of democracy. We have learned nothing.
Just wait. KPMG report on airport will show it makes no sense and our legislators will ignore that too. Remember consultant contracts are also just another way of sharing to friends and family. They are not really to be used for information. See that they have gone ahead without even getting the KPMG report to line their pockets more quickly.
Shameful and heartless set.. Leave MW and vote them all out.
Puerto Rico minimum wage is 10.50 which is probably the most comparable since it’s an island that also runs off of the US dollar.
Puerto Rico working population is in the millions to BVI working population is about 25K and their economic activities of buying and selling is higher; therefore, the $10.50 minimum wage of PR cannot be sustained in BVI economy of only 25K working adults.
The new minimum wage should have increased to $ 8.00 per hour for about a year and then by next year to $ 9.00 per hour.
If we do increase the threshold of the first $10K to $15K, we must add back another two tiers of taxation at the higher salaries of 10% and 15%, say those over $150K at 10% and those of over $500K at 15%.
Then if we wish to sustain the American Dream lifestyle in the BVI, the foreign and local investments into business ventures have to increase with a simultaneous increase of immigration of labour, to a working population of 35K by 2030. Let us be real, we are not getting as many babies as before. Look around us – illegal immigration is being accommodated by the West with tax payers dollars to increase the voting population, increase the category of the ruling ethnic group, gain persons for military service and so on.
So the minister saying, go get a bank loan to pay your bills. Wow. She is very bright.