The last time there was an increase in the minimum wage in Belize was 2012 when it was increased to three dollars and thirty cents per hour for both agro production and unskilled labourers. While it meant only a twenty cent increase for shop clerks and other unskilled workers it meant an increase of eighty cents for those that toiled under the relentless rays of the sun in Belizean fields and farms. Yes in 2012, those who worked the fields in the agro industry earned just two dollars and fifty cents an hour.
The case for raising the minimum wage is a straightforward one. Wages need to be adjusted periodically to avoid the erosion of the purchasing power of the worker. In addition, a modest raise in wages stimulates consumer spending and therefore helps the bottom line for businesses and helps us to grow the economy by increasing consumer demand. Belize benefits from experiencing improved worker productivity.
The increase in government mandated minimum wage must be delicately balanced between the effective protection of labourers and the development and sustainability of enterprises. Furthermore, as in other countries, the minimum wage must be adjusted to the differences in the cost of living across varying regions. The cost of basic goods and services in the cayes and in other top tourist destinations like Placencia are far above those of similar quality on the mainland. Therefore, minimum wage rates should be raised in those areas to accommodate for the higher cost of living.
Recently, the buzz phrase among economists and other economic development gurus is living wage. The living wage is one which will allow the worker to meet basic needs of housing, food, health, education, transportation and other essentials such as clothing and to maintain a basic standard of living. The Greater London Authority (GLA) uses the poverty threshold figure as the basis to compute the living wage. This figure is basically sixty percent of the median income of the work force plus fifteen percent to allow for emergencies. We must bear in mind that the United Kingdom has access to free health care through their National Health Service and free education for students up to age sixteen and a far more efficient public transportation system. Normal Belizeans must pay for these luxuries and of course higher education is only for the very privileged and politically connected. The Statistical Institute of Belize in its most recent report puts the median monthly income for Belizeans at $1,244 as at April 2019. By our calculations sixty percent of the median plus a conservative fifteen percent to attempt to cover health, education and transportation puts the current living wage at a minimum of $4.40 per hour. This figure is well above the current minimum wage of $3.30 per hour.
The PUP plans to increase the minimum wage to alleviate what the Hon Cordel Hyde described during his 2019-2020 budget presentation as the harsh and bitter conditions “in every run-down house, in the faces of poverty…in every barefooted child.” The current minimum wage is much lower than the living wage the Belizean worker requires to feed and care for their family. The truth is that for years the purchasing power of the common Belizean has been dwindling and this UDP government has turned a deaf ear and a blind eye to the plight workers face in order to provide even basic necessities.
Cynical critics will say that a raise in the minimum wage will trigger an increase in unemployment as employers seek to cut operation and production costs. However, the PUP will implement the increase in wages tempered with a reduction in the fuel taxes among other measures in order to keep costs down for employers and to mitigate unwanted effects in the short run. Raising the minimum wage will help to activate the economy as the labour force increases consumption and spending. The PUP is committed to providing genuine solutions that will ensure tangible results effectively lowering poverty rates and improving the quality of life for all Belizeans.