While an overwhelmingly majority of the St. Kitts and Nevis Chamber of Industry (SKNCIC) and Commerce are in favor of a review of the national minimum wage, the Chamber is of the view that this should be done in a balanced manner to minimize adverse economic impacts. This was the focal point of the Chamber’s official position on minimum wage increase, as presented during it’s Annual Christmas Luncheon on Wednesday December 13, 2023 at the St. Kitts Marriott Resort.
Mr. Kevin Thompson, a SKNCIC Director, in presenting the chamber’s position on the minimum wage review, said the Chamber proposed minimum wage for a 40-hour work week be increased to $400 per week i.e., $10 per hour. “We propose the new minimum wage of $400 weekly for a 40 Hour Work Week; equivalent to $10 per hour. This represents an 11% increase in the minimum wage as it stands; and also considers the fact that by increasing the minimum wage, hourly wages for non-minimum wage earners within companies would also have to be increased because of the cascading effect,” Thompson said. “Our proposal was not an arbitrary one. It is the result of a comprehensive analysis based on the Consumer Price Index,” he added.
Mr. Thompson hinted to possible impacts of increasing the minimum wage without considering other factors that could negatively impact the economy. This includes a noncompetitive economic landscape, making St. Kitts and Nevis unattractive to foreign direct investments and impacts to the hospitality sector. “An excessive increase in the minimum wage can cause a shock to a fragile hospitality sector still recovering from the devastating effects of Covid-19. This could potentially increase the cost of our tourism product in an already competitive tourism market. It can also result in dramatically reduced hours for some persons working in the hospitality sector, especially in our hotels during low season,” Thompson said.
“Further an excessive increase will translate into significant increase in the cost of doing business in St. Kitts and Nevis making us less likely to attract foreign direct investment as we compete with our OECS countries like Dominica, Grenada and St. Vincent with a minimum wage threshold significantly lower than ours as it stands,” he argued.
Mr. Thompson posited that the Chamber proffered a fixed formula and a balanced approach when reviewing the minimum wage. He also suggested a triennial review of the minimum wage, to prevent a prolonged gap between when increases are approved. The last increase was made nine years ago.
Meanwhile, Ms. Patricia Welsh, Policy Advisor at the Eastern Caribbean Central Bank, engaged the Chamber members in a presentation and question and answer segment on the proposed minimum wage increase, pointing out that the private sector would have to shoulder the larger share of minimum wage payments across the labour market. “An increase in the national minimum wage would benefit approximately 3,081 jobs. Notice, we did not say persons. And the reason why, I’m sure you can tell me, there are persons who have more than one jobs,” Ms. Welsh explained. “Of that total (minimum wage payments), the private sector accounts for the largest share 77.9%; government 19.4% and statutory bodies 2.8%. Of the government total minimum wage jobs, STEP accounts for 50.3% and NIA (Nevis Island Administration) accounts for 13%,” she disclosed.
The Chamber of Commerce has been participating in the Minimum Wage Advisory Committee since March 2023. During the presentation of the 2024 Budget Address to the National Assembly on December 13, 2023, Prime Minister Dr. the Hon. Terrance Drew announced that as of January 01, 2024, the minimum wage will move from $9 per hour or $360.00 per week to $10.75 per hour or $430.00 per week.