20 Per Cent Increase in National Minimum Wage

As of January 31, the national minimum wage will be increased to $2,400 per week up from $2,000, reflecting an increase of 20 per cent. Also, the hourly rate for industrial security guards will be increased by 12.5 per cent, moving to $90 per hour from $80 per hour.
Minister of Labour and Social Security, Horace Dalley made the announcement in the House of Representatives yesterday (January 11).
For the industrial security guards, life insurance coverage is to be sustained at $1 million with double indemnity protection both during and outside of hours of work, while laundry allowance will be increased from $16.00 per hour to $18.00 per hour, an increase of 12.5 per cent.
Firearm premium allowance will be increased from $17 per hour to $20 per hour, an increase of 17.6 per cent and dog handler’s premium allowance will be increased from $12.00 per hour, an increase of 16.7 per cent.
Mr. Dalley explained that the Ministry had been working towards a January 1 deadline for the increase, but the date had been missed, because by the time the deliberations were completed, Parliament had already had its last sitting for the 2004 calendar year, “making it impossible to put the proposed changes before the House until now”.
Mr. Dalley noted that the proposed 20 per cent increase in the minimum wage was arrived at after careful consideration and consultations with employers, trade unions, industrial security guards, the Planning Institute of Jamaica and the Household Helpers Association, among other interest groups.
He said that the increase would keep the workers ahead of inflation. “The accumulative inflation rate for January to November 2004 stood at 13.1 per cent, and for the calendar year, it is not expected to exceed 14 percent”, he stated.
In arriving at this figure, he continued, “we also had to be mindful of the fact that many Jamaicans of modest means have little option but to employ the services of domestic helpers, just to enable them to go out and earn a living wage. Any minimum wage set by government therefore, must remain sensitive to the economic circumstances of those workers in the private and public sectors”.
The Labour Minister made particular mention of “the sacrifice” being made by public sector workers under the Memorandum of Understanding, many of whom, he pointed out, employed household helpers. “We therefore had to balance the interest of both groups and carefully consider the implications for the wider economy before arriving at a reasonable minimum wage adjustment.”
Mr. Dalley added that some groups, in lobbying for a lower increase than had been recommended, advanced the argument that any double-digit increase in the national minimum wage would lead to the possibility of job loss. While common sense might suggest that this was possible, he stated, “empirical data from a range of developed and developing countries have failed to establish any direct link between these two variables”.
He assured his colleagues that the level of increase proposed represented the barest minimum a worker could reasonably be expected to survive on, and a level that could be absorbed without any possible shocks to the economy.
Mr. Dalley stated that it was necessary to remind the public that the minimum wage was not a recommended salary, but a wage base. In fact, he noted, many employers of conscience had long determined that in order to encourage decent and dedicated work, and to reasonably reward workers for their service, they must offer wages well above the legal national minimum wage, once they had the ability to pay.
Commenting on suggestions that the Ministry considered a return to the regime of differentiated categories for the minimum wage, based on the sector of employment or category of work, Mr. Dalley said, “this is not a practical course. It would involve the introduction of additional layers of bureaucracy, and be extremely difficult to enforce”.
He informed that the Ministry would, during this legislative year, work to make amendments to legislation governing the national minimum wage to ensure a more punitive schedule of sanctions for non-compliance.
He issued an important word for employers of security guards, reminding them that recent amendments to the Labour Relations and Industrial Disputes Act, had incorporated a wider definition for the term ‘worker’ clearly placing security guards within the legal ambit of a worker, even though he is classified as ‘an independent contractor’.
“By virtue of this, security guards, by law, have a legitimate right to freedom of association and the right to collective bargaining,” the Minister stated, adding, “I intend, as Minister of Labour and Social Security, to fairly, fearlessly and even-handedly enforce the law and to protect the rights of employers and workers alike in securing an environment for greater productivity, competitiveness and decent work.”
Responding to arguments put forward by Member of Parliament for South Eastern Clarendon, Rudyard Spencer that the level of increase was unacceptable, Mr. Dalley stated, “the minimum wage that a country establishes is the base below which no citizen of working age should receive remuneration. We have had some reports that in some areas, like bartenders and store clerks, people pay even lower than the minimum wage, and we have to move on them vigourously. That is why I have said I intend to get an amendment to the minimum wage act to establish more realistic and punitive fines for breaches of the Act”.
He also informed that although the original January 1 deadline had been missed, there would be no retroactive payments.