Premier Natalio “Sowande” Wheatley has acknowledged that low-paid workers were let down by the government’s sudden decision to delay a minimum-wage increase just before Christmas, but he said the planned boost is still on the table.
Mr. Wheatley told the Beacon that the abrupt reversal — which came three days after the increase was due to take effect — was triggered by fears that it would exacerbate the cost-of-living crisis.
The boost from $6 an hour to $8.50 an hour will now be “phased in” during the next few months, the premier said.
The reversal triggered surprise in early December when Mr. Wheatley announced it just three days after it was scheduled to be implemented on Nov. 30.
Cost of living
Asked for an explanation on Dec. 28 at the official re-opening of the Peter Island Resort, Mr. Wheatley said, “What we want to ensure with the minimum wage is that we don’t raise the cost of living for everybody. Because, of course, different companies — the minimum wage raise is going to add to their wage burden.”
The premier added that he decided on the delay after firing Lorna Smith from her post as minister of financial services, labour and trade in October and taking over that role himself.
“The question for me, coming in as a new minister, is what will they do with those increased payroll wages?” the premier said. “Is it going to be passed on to the consumer? That is something that we want to avoid.”
‘Over time’
Mr. Wheatley explained that the new rate will now be delivered in stages.
“We are looking at a strategy that perhaps we phase the increase over time, and we look at increasing the exemption on tax for low-income earners, so that the burden is shared between the businesses and the government,” he said.
Asked if he felt he had disappointed low-paid workers, the premier said, “I do accept that. But the same persons that we disappointed would have been disappointed if the prices went up. It would have nullified any increase that they might have, and they would never realise that until after the minimum wage was increased.”
However, Mr. Wheatley claimed low-paid workers would benefit in the coming months.
“But I want to assure those persons that we will increase the minimum wage, and we will increase the exceptions for them,” he said.
Criticism
Ms. Smith, who now serves on the opposition, has said the sudden delay was “reckless” and insisted the government had ample time to bring it in on target.
The former deputy premier said the halt in the wage increase was destabilising for workers and companies alike.
Business leaders were also left in the dark by the sudden change of policy.
Chamber of Commerce Chairwoman Shaina Smith-Archer said the organisation had not been informed of the reason for the delay.
History
Before government announced in July that the $8.50-per-hour rate would come into place by Nov. 30, the independent Minimum Wage Advisory Committee, which Mr. Wheatley appointed in November 2023, had recommended an increase to $9 an hour following months of deliberation and consultation with focus groups and the wider public.
The move to form the committee came in the wake of a 2022 review of social assistance in the territory by the Belgium-based non-profit Social Policy Research Institute, which declared the $6 an hour figure was “well below” what was needed.
But the study also said the speed at which rates could be increased should take account of economic conditions.
Prior to the previous increase in October 2016, the minimum wage had stalled at $4 an hour since 1999.
