National living wage moves closer
Some of Bermuda's lowest-paid workers could triple their wages within three years after a national living wage is introduced.
Economic experts, union officials and employers should decide on the living wage, to be implemented by 2021, according to a report from the bipartisan group researching the issue.
The move intends to ensure all workers can afford food, housing, clothes, medical care, education for their children and transport.
The report by the Parliamentary Joint Select Committee on the establishment of a living wage, tabled on Friday by chairman Rolfe Commissiong, a backbencher, points to the struggles faced by some families in Bermuda.
It says some hospitality staff earn between $5 and $7.50 per hour, while “low-skilled workers” such as cashiers, gas station attendants and laundry machine operators can earn less than $8 per hour. For many, this works out at less than $15,000 per year.
The report also says the cost of living in Bermuda is 98 per cent higher than the United States, and rent expense is 146 per cent higher than the US.
It advises that from May 2019, a minimum wage of $12.25 per hour be introduced, representing gross income of $25,480 per year, about 40 per cent of the median wage income of $63,712.
It says that by May 2021, a relative low-income threshold be implemented at an expected $18.23 per hour, or $37,918 per year, about 60 per cent of the median income.
The report states: “The information, feedback and data gathered during the JSC's first round of consultations and compiled in this report demonstrates that low-income wages in Bermuda have not kept pace with our cost of living since at least the Nineties.
“Wage stagnation has caused the overall income of lower wage earners to remain behind the cost of living.
“In response to this trend, many countries have enacted a minimum/living wage. In fact, approximately more than 90 per cent of countries designated as International Labour Organisation member states currently have a statutory wage scheme of some sort.”
It adds: “What we do know is that there is a race to the bottom when it comes to the hospitality industry, with most wages for those earning gratuities such as wait and related staff falling between $5 to $6 upward to $7.50 per hour in some of our larger hotels.”
The report recommends:
• minimum wage rates be gradually implemented over a three-year period, beginning next May
• a living wage be introduced in 2021
• the figures be tied to the Consumer Price Index to compensate for inflation.
It calls for a Wage Commission to be established, comprising “a body of experts along with social partners from the Trade Union Congress and employer groups”.
It states: “The commission would be responsible for implementing the living wage rate in 2021, based upon a methodology determined and approved by the commission in conjunction with the Bermuda Department of Statistics.”
Based on data compiled by the Department of Statistics, it says, this figure would be $18.23 per hour.
According to the report, committee member Jason Hayward, a PLP senator and president of the Bermuda Public Services Union, proposes that the Wage Commission bases the living wage on the cost of a basket of goods.
Citizens Uprooting Racism in Bermuda, which has called for a living wage since 2014, said yesterday: “Worryingly, the 2016 Census shows that disparities continue, the income gap is widening, and an increasing number of Bermudians are failing to make ends meet.
“With both parties recognising the desperate need to introduce such legislation for the welfare of the people of Bermuda, it is therefore commendable that the bipartisan Joint Select Committee have committed to the many meetings and hours of work necessary to bring this legislation before the House for debate.
“Curb is hopeful that the bipartisan/collaborative approach continues in the House of Assembly when this matter is debated in the coming weeks.”
The report defines the minimum wage as a “legally guaranteed rate that all persons of legal working age must be paid”.
It defines the living wage as “the amount of income necessary to afford a worker and his household a decent standard of living”, adding: “It is a calculated wage that 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.”
The living wage committee was formed in June 2016 under the One Bermuda Alliance government. Its members are Mr Commissiong and Mr Hayward, OBA MP Leah Scott, PLP MP Lawrence Scott and OBA senator Nandi Outerbridge. It used contributions from more than 20 consultants, including economists Craig Simmons, Nathan Kowalski and Robert Stubbs.
Ms Scott said earlier this month that the report was “fundamentally flawed” because the recommendations were drawn up before full discussions with businesses had taken place.