The lowest paid workers in the Virgin Islands will belatedly get a wage boost after a high-profile salary increase was snatched from them shortly before Christmas.
But instead of the $8.50 an hour initially promised from the end of last November, a $7.25-an-hour alternative will be introduced in July, Premier Natalio “Sowande” Wheatley announced.
The move comes after months of uncertainty on the matter following Mr. Wheatley’s abrupt decision to postpone the increase three days after it was scheduled to take effect.
Though the hike will raise the minimum wage from the $6 an hour set in 2016, it is below the $9 recommended by a committee asked to investigate the matter.
The premier blamed his decision to shrink the increase on the potential knock-on effects to cost-of-living prices. Mr. Wheatley, however, also said that the change will begin a “phased increase.”
Delay explained
While fielding questions last week on a government broadcast dubbed “Virgin Islands Voice,” Mr. Wheatley explained that he had decided to reconsider the hourly amount after he fired Lorna Smith as minister of financial services and labour last October.
“We had announced an $8.50 minimum wage some months ago,” he said. “When I became the minister of the subject, I wanted to review it. And given everything that was happening in the world — and in discussion with businesses and in discussion with our public stakeholders — we decided to take a phased approach, so we wouldn’t go directly to that $8.50.”
Mr. Wheatley didn’t say when the next phase may arrive, but he said the government needs to monitor a “basket of goods” before deciding on a further increase.
“Before we increase more, we have to make sure we have the ‘basket of goods’ in place,” the premier said. “We have to make sure that we have certain measures in place as it pertains to consumer protection so that we don’t have the prices go up too much.”
Mr. Wheatley added that he is considering increasing food imports from the Dominican Republic and other non-US countries and territories to try and reduce household outlays.
“We’ve been talking about getting cheaper goods from different supply markets,” he said. “I believe when we do some of those things, we’ll be in a better position to increase the minimum wage to the full $8.50.”
Mr. Wheatley, who told the Beacon in January that he would not be able to live on the minimum wage himself, claimed an increase would have an economic impact on everyone.
“You raise the minimum wage for a group, but everybody’s prices will go up,” he said. “So it’s something that we have to be careful about, and we have to be conscious of. We know it’s going to have a domino effect.”
Mr. Wheatley added that wage increases will be ongoing.
“We know that $6 is inadequate,” he said. “So we will raise that up in the first instance and then we will prepare for further increases. We will have periodic reviews.”
Wage history
The minimum wage was increased to $6 per hour in October 2016 after being kept at $4 since 1999.
A 2022 review of social assistance by the Belgium-based Social Policy Research Institute declared that $6 an hour was “well below” what was needed, though it also stated that the pace of increase should consider prevailing economic circumstances.
In November 2023, Mr. Wheatley appointed a Minimum Wage Advisory Committee drawn from various sectors of business and society.
The committee conducted focus groups and outreach sessions before recommending an increase to $9 per hour.
$8.50-per-hour plan
The government then announced last July that the base rate would be raised to $8.50 an hour on Nov. 30.
Mr. Wheatley then postponed the increase three days after it was scheduled to take effect.
