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Living wage report delayed

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Bermuda continues on a path towards consideration of a living wage (Photograph by Akil Simmons)

A year after the implementation of a Bermuda minimum wage, the second portion of the Wage Commission’s work remains undone.

There has been a delay in the commission’s rendering of an opinion on a living wage for Bermuda.

The island’s first minimum wage came into effect on June 1, 2023, but the body that placed recommendations on the measure before government was also expected to deliver proposals for a living wage.

That commission has gone by the wayside, a second has been empanelled and it could easily be 2025 before the new commissioners have the needed data to finalise a report that could be considered by Parliament.

In April 2021, the Wage Commission provided the Minister of Economy and Labour with its report, which led to a government position paper and eventually the mandated minimum wage rate of $16.40.

The paper also stated: “There will be no changes to the minimum wage rate set for June 2023 until the commission publishes [a] second report due April 2024.”

But the Wage Commission was disbanded last year, reconstituted just this March, and is only at the beginning of the process of preparing a report on a living wage, defined by the International Labour Organisation as a basic human right.

The Chamber of Commerce has representation on the commission and was included in discussions on what information would be needed to define a living wage.

Danielle Riviere, CEO, Bermuda Chamber of Commerce (File photograph)

The chamber’s chief executive, Danielle Riviere, noted: “The cost of living in Bermuda is extremely high and these same high costs are impacting businesses.

“The largest expense within a business is its staff. Increasing that cost will most definitely cause businesses to increase the costs of their goods, creating a cycle that does not change anyone’s personal financial position.

“Therefore, implementing a living wage must begin with a conversation about how to reduce the cost of living in Bermuda.”

She also pointed out that the new Corporate Income Tax provides an opportunity for tax reform, potentially reducing Bermuda’s high cost of living.

The new commission is chaired by Mischa Fubler, and includes Nicola Paugh, Andrew Simpson, Phillip Barnett, Shannon Thompson, Steven Holdipp and representatives from the Ministry of Finance and the labour relations department.

Mischa Fubler is the chairman of the new Wage Commission (Photograph by Akil Simmons)

Mr Barnett is the only holdover from the first commission disbanded at the end of the year. The new commission has met at least twice since its formation and resolved to benchmark new living-wage proposals against the household expenditure survey data, which Mr Fubler expects to be available by next year.

Meanwhile, he expects that the Ministry of Economy and Labour may soon put out a request for proposals for vendors to conduct research using an alternative methodology that he believes may potentially accelerate timelines.

The commission has considered options for collecting/accessing current data and researching the solicitation and selection of researchers.

The first commission had twice started the process of a getting a vendor to do the research work, before it was disbanded.

Cordell Riley chaired the first Wage Commission (Photograph supplied).

The delays may have contributed to the dissolution of the first commission, although the chairman, Cordell Riley, would not say.

He said: “We put it out to tender twice and had someone ready to begin the work, but were eventually told to wait. It is now the responsibility of the new commission.”

Mr Fubler said: “I’m not very familiar with the government procurement process's typical timeline, but my understanding is that the approval process can take several months.

“The expectation is that we provide living-wage recommendations within the year of the commission being embodied.

“This timeline will naturally be dependent on the availability of current data and researcher availability.“

Mr Fubler, a candidate in the 2023 Smith’s South by-election, said: “I don’t want to pre-empt timeline decisions by the commission. There will be some challenges in collecting the requisite data.

“For example, the household expenditure survey was commenced January 2, 2024, and the next census isn’t due until 2026.

“However, many of the commission members have significant statistical analysis expertise and experience, so I’m confident we’ll be able to advance the important work of establishing living-wage recommendations to the Government.”

Six years ago, a report from the parliamentary joint select committee on the establishment of a minimum/living wage regime for Bermuda was submitted to Parliament (July 20, 2018) by Rolfe Commissiong, who chaired the committee.

The report concluded: “There is a cost-of-living crisis and we all have a part to play in changing the rules. The wage gap must be closed, and we have to ensure that wages earned reflect the true costs of living in our community, and that everyone is able to earn what they need to support their families.”

There were actually two Joint Select Committees formed — separated by an interim report and the 2017 election — which eventually led to the Employment (Wage Commission) Act 2019 and the subsequent appointment of the first commission.

The commission’s report proposed a framework for the establishment of a minimum wage but also said a living wage “should provide for food, housing, clothing as a basic measure of need but also items such as medical care, children’s education and transportation needs. In some instances, savings for the future are also included in calculating a living wage”.

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Published June 11, 2024 at 8:00 am (Updated June 12, 2024 at 8:19 am)

Living wage report delayed

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