In other news, January 1st has come and gone, which means that the minimum wage has increased from $3.30 an hour to $5. For many employees, it's a slight weight off their shoulders to help them keep up with the rising cost of inflation. But for employers, it's more like a nightmare. Many of them say they were not consulted, and the government just went ahead and raised the minimum wage instantly, rather than gradually.
Now, many business owners will now have to decide whether they will have to hike up the cost of their products or let go of some of their employees.
Today, we spoke to a couple of them to see how the increase has affected their business so far. Courtney Menzies has this story.
posted (November 29, 2022)
John Briceno, Prime Minister
"We have announced this months ago that this is coming, we have been having these discussions, it was in PlanBelize, and the minimum wage is going up on the first of January."
On November 29th, the business community received a shock when they learnt that only 33 days later, minimum wage would increase by one dollar and seventy cents. Since then, the Belize Chamber of Commerce has lobbied for the government to rethink its plan:
posted (December 12, 2022)
Marcello Blake, President, BCCI
"The Chambers supports the increase. We're just saying it has to be gradual so that our members can adjust to the economic strains that they will definitely be faced with."
But the government didn't back down and now employers have had to increase their minimum wage workers' pay. And they say while salaries should match the increase in inflation, the jump from three dollars and thirty cents to five dollars an hour is not without consequences.
Umesh Mahitani, Owner, Mikado Textile Palace
"Initially I would say for most employees it's justified because of the cost of living being high and most of our employees are already getting more than $5 an hour, a few were below that and we're adjusting that shortly but to go from $3.50 or $3.30 or whatever it was, to $5 is maybe a drastic increase and the security company has already told us that their rates have gone up then we just got notice from the garbage company that their rates are going to go up so now we just have to wait out the rest of the week to see who else is going to send us letters to say that they're services is going to go up so it's going to have a domino effect. Here at Mikado we may decide to maybe cut down on hours and maybe, to be able to keep going and maintain the expenses, I think, but we're still going to watch it and see how best we can move along."
"I think we're at bare bones right now, and this is what they call maaga season, so I don't think we'll have to let go anyone, no, that's one of the things we don't do actually, let go people, we would like to hire more people if possible but not let go people."
Courtney Menzies:
"Do you feel that the government was a bit rash on implementing it on January 1st and being adamant about that date?"
Umesh Mahitani, Owner, Mikado Textile Palace
"I'm confident that they have enough technocrats and smart people in the government to be able to say, okay, make that decision. We already know that cost of living is high, yes that's accepted but maybe a gradual increase could have been a better approach."
Lee Mark Chang, Owner, Chon Saan Palace
"When I first heard about it, I was a little bit shocked. I thought it was going to be a gradual increase rather than an upfront increase up to five dollars."
"Well, everything is going up, oil, butane, chicken, all my stocks have been going up, now wages is going up too so we'll see within the first two weeks how the reaction goes, more than likely I will have to either bring up the prices or I have to make sure that I streamline my staff and have to maybe let go a few but we'll see how we'll try to work it out that we don't need to let go of anybody and just try work between pricing and wage, so we'll try to find a balance for it."
"My starting salary is $180 so we don't have any per se minimum wage but the jump from $180 to $225 for 45 hours, that's like 30 to 35% increase in salaries, we're talking about 30-15 employees."
"At the end of the week, which the weekend is payday, then we will see what is the difference between it. Then you have to factor in that New Years was also 8 hours free for holiday pay so this week and the following week we'll see, the following week will be a better view of the salary."
Courtney Menzies:
"You do agree though there needed to be some increase for these workers considering the price of living is going up."
Lee Mark Chang, Owner, Chon Saan Palace
"I understand, yes, everything is going up and of course salary must continue going up too. But when you're talking 30-35% jump from $180 base pay to $225, that's a huge increase, plus overtime. Overtime will be $7.50 an hour so my staff will definitely have to start being productive now."
But the Leader of the Opposition disagrees with the business community's complaints - and even with the government. He says the increase should have been higher, since it will result in more money being plugged into the economy.
Shyne Barrow, Leader of the Opposition
"I would have hoped that it was $10 and I am not satisfied that the $5 actually means the $5, I think in inflation, in price gouging, in the high energy crisis that we have, it doesn't amount to much. What I would say to the chamber and to the business community is that we need to revolutionize our mindset. The more money that you give these 30,000 people, the more they will spend. We are a consumer planet, not just in North America and Central America, everywhere in the world, I don't know a place that is not driven by consumption so giving people more in salary is not necessarily taking away, it's giving them more to spend on the economy, and I think it pans out well in the end so don't be afraid of giving your society more because that means that they will spend more, they're not going to keep that money in a bank."
And while that would be a silver lining for the business community, right now, employers are waiting with bated breath to see if they will be forced to increase prices or decrease the number of employees.
The last minimum wage increase was over a decade ago, in May of 2012.
