Call for action on minimum wage
Action must be taken to ensure that working Bermudians can live with dignity, panellists at a public forum on a living wage have said.
Rolfe Commissiong, chairman of the Joint Select Committee on the Establishment of a Living/Minimum Wage, told the dozens in attendance at St George's Cricket Club that many in the workforce struggled to make ends meet.
He said he had spoken to a woman who worked at a restaurant in Hamilton, but still had a hard time getting by.
Mr Commissioning said: “I came to find out she was working as a part-time worker and she earned $7.50 an hour.
“As a part-time worker, she had no health insurance, but she had worked over the previous two weeks 96 hours with no overtime. She was paid $720 for those 96 hours. That means after you take out social insurance and payroll tax, she took home $620.90.”
Mr Commissioning, speaking at a forum held on Thursday night, said there had been a global “race to the bottom” in salaries and the use of low-cost foreign labour had accelerated the trend.
He explained that the Government would create a wage commission to look at the creation of a living wage — one that ensures workers a decent standard of living — or a minimum wage.
Phil Perinchief, a lawyer, said the wage commission would hold as series of meetings to determine the best course. He added that the cost of living should also be addressed as part of the commission's work.
Mr Perinchief said: “A number of questions will arise, requiring precise and accurate answers. Issues such as the establishment of a true and representative poverty data line in Bermuda's circumstances.
“What constitutes cost of living? What is a reasonable profit margin or markup that a given entrepreneur should make or charge? 100 per cent? 200 per cent? 500 per cent? What's reasonable?”
Mr Perinchief said: “The idea is that we are trying to bring down or reduce the cost of living. Then we will be in a better position to pitch the living and minimum wage at a point whereby the two converge.”
Nathan Kowalski, a financial analyst and commentator, who emphasised that he was speaking in a personal capacity, said inequality levels were the highest they have been since 1929 and inequality damaged a country's gross domestic product. But he said it was crucial for Bermuda to strike the right balance. Mr Kowalski said: “We cannot benefit from a minimum wage if there is no wage to be had.”
He said a recent study in the US examined the effect of increased wages in restaurants and found that 43 per cent of restaurants cut jobs, 64 per cent of restaurants reduced staff hours and 71 per cent increased menu prices.
Mr Kowalski added: “I'm not saying that this will happen for sure, but these are unintended consequences that can happen.”
Mr Commissiong said later that there had been a lot of discussion about the effect of minimum and living wages, but it was rare that the worst predictions materialised.
He said: “In Germany, the economists there were saying there would be 200,000 jobs lost as a consequence of them for the first time putting in place statutory wages about four or five years ago. In fact the economy went the other way. It went into a boom.”
Mr Commissiong added: “One thing that is always ignored is that fact that when people get more money in their pocket, particularly at the bottom of income distribution, for better or worse, they spend disproportionately more of it.
“And in a consumer-based economy, that could be good.”
The St George's meeting was the first of three. The next will be held on Thursday at St Paul's AME Centennial Hall in Hamilton. The last will be held at Somerset Cricket Club on May 16.
Both meetings are scheduled to start at 6.30pm.