The government’s decision to increase the minimum wage from $6 to $8.50 per hour at the end of November is an important step in the right direction.
But for too many low earners, it’s not a big enough step.
The increase — the first such raise in eight years — fell 50 cents short of the $9 per hour recommended by the Minimum Wage Advisory Committee.
And given the ongoing cost-of-living crisis, even $9 per hour is not sufficient to meet basic living expenses in the territory — especially for workers with families to support.
Still, any increase is a boon, and the committee made other sound recommendations that will help ease the burden on low earners and businesses alike if the government implements them.
The suggestions include reviewing the wage again in five years and setting up a system to review it regularly after that; investing in workforce training; developing a support mechanism for small businesses to adapt to higher labour costs; and considering other ways to reduce the cost of living in the VI.
The committee also noted that some residents called for a payroll-tax cut for minimum wage earners.
Leaders should follow such advice, as well as considering another minimum wage increase in the next year or two.
As rightly acknowledged in the committee’s thorough 104-page report, recent inflation has greatly exacerbated the gap between household budgets and the cost of living in the territory.
Many of these factors are not unique to the VI and were worsened by the Covid-19 pandemic and governments’ policy responses to it.
But this territory’s small, immigrant-dependent workforce faces extra constraints, including an outsize dependence on imports as well as climate-crisis impacts like the 2017 hurricanes that devastated the housing stock and caused rents to skyrocket for years afterwards.
Of course, minimum wage increases can pinch the private sector — especially the many small businesses that power this territory’s economy and may need assistance in shouldering the risks of entrepreneurship.
But the minimum wage is one of the most important measures in any government’s toolkit to ensure that its citizens have a reasonable quality of life.
Given the absence of a current census and other recognised measures of poverty, it is difficult to say how many residents find themselves unable to meet their basic needs for food, shelter, health care and other essentials.
But improving the circumstances of society’s most vulnerable is a laudable goal at any time.
Additionally, basic economic reasoning offers another rationale: Increasing the wage can often promote overall economic growth as low-income earners get more money in their pockets.
We doubt that legislators have had to live on the minimum wage for some time, if ever. But we hope they take the committee’s suggestions seriously and follow up with concrete action.
Any territory as well-heeled as the Virgin Islands should be able to take proper care of all its people.