– Private Sector Commission chair
PRIVATE Sector Commission (PSC) Chairman, Nicholas Boyer, does not believe that the private sector is prepared just yet to accommodate an increase in the private sector minimum wage, given the economic situation the country has faced over the past few months.
Guyana, like the rest of the world, had seen many businesses severely affected by measures put in place to curb the spread of the COVID-19 virus. When the virus first hit in March, many businesses were immediately required, by law, to close, and for those that remained open, sales took huge dips.
It was only a few months now that some businesses have been allowed to reopen and things are slowly returning to normal for some.
“At this time, the private sector doesn’t have the ability to withstand an increase in minimum wages,” Boyer shared in an interview with this publication on Tuesday.
During the pandemic and economic downturn, some businesses were forced to let go of staff, in some cases, businesses arranged to pay employees partial salaries while they stayed at home
“COVID-19 has destroyed sales for many companies. As a result, payroll expenses are a higher percentage of sales, which has resulted in furloughs and layoffs. To implement a higher minimum wage now would further increase layoffs and furloughs,” Boyer related.
It was in August that Minister of Labour, Joseph Hamilton, had indicated that he would be re-initiating negotiations for the private minimum wage to be increased to $60,000.
The private sector minimum wages has not increased since 2017, when it was raised from an hourly rate of $202 to $255, taking the monthly salary from $35,000 to $44,200 for a 40-hour week. Comparatively, the minimum wages for the public sector is currently $70, 000.
In October, however, the minister did note that the impact of COVID-19 on businesses may affect the timeline of the implementation of the proposal to increase the private sector minimum wage.
The agreement for the increase is negotiated by a tripartite committee that includes representatives from the Ministry of Labour, the private sector, and the two umbrella trade union bodies: The Guyana Trade Union Congress (GTUC) and the Federation of Independent Trade Union in Guyana (FITUG).
In a previous interview, GTUC President, Coretta McDonald, had noted that while the union was not entirely dismissive of the possibility of delaying the implementation of the increase, they would be looking for a finite timeline of how soon it could be rolled out.
However, on this note, Boyer said given the tentative situation with the COVID-19, he is unsure of how soon he would advise the moving forward with the implementation.
“That’s a hard one at this time, particularly without an understanding of when the pandemic will end,” Boyer offered.