In his Independence Day address, Prime Minister John Briceño announced that in January 2023 his government will be delivering on a campaign pledge of his party, to increase the minimum wage from $3.30 per hour to $5.00 per hour. The last time the minimum wage was increased was a decade ago, in 2012, when it was increased from the $3.10 per hour set in 2010 to the present $3.30.
The 2010 wage increase wasn’t across the board. The International Labour Organization (ILO), at the website www.ilo.org, said the minimum wage rate in Belize was adjusted to BZ$3.10 per hour in August 2010 “for all workers except manual/agricultural workers.” Apparently, not all workers will qualify for the full increase that the PUP promised when it contested the November 2020 General Elections. Amandala journalist, Ms. Khaila Gentle, reported last week that the government was carrying out a number of consultations with the public, and that personnel from the Ministry of Rural Transformation, Community Development, Labour, and Local Government had explained that their objective was “to discuss the impact of the increase for unskilled workers and those engaged in elementary occupations, interventions required to ensure compliance, and a potential formula for gradual increase in specific sectors and future wage adjustments.”
The PUP had promised to deliver on the minimum wage increase as soon as the economy roared back from four consecutive quarters of negative growth under a previous administration. But the pandemic followed, and to add to our economic woes, war came to Europe. The cruel bombardment and occupation of parts of Ukraine by Russia has led to a massive increase in the cost of two essential tools of industry: fuel and fertilizers.
Our economy has improved since we were in the full grip of the pandemic, but no one, not even the most die-hard PUP, claims to hear a roar. The fact is that our economic engine has never hummed. We might have improved beyond the too familiar disappointing “sputter” in the second decade of this new millennium, that period when the oil money was pouring in, if our once robust citrus and shrimp industries hadn’t dipped to near non-performance because of two devastating diseases.
Earlier this year, on July 1, the GOB’s Press Office had announced that a task force had been set up “to oversee the gradual implementation of the five-dollar minimum wage”, and the PM had explained that the reason his government had to move cautiously was because it needed to ensure that the economy could absorb the increase. The Belize Chamber of Commerce and Industry (BCCI) had expressed support for a gradual implementation of the increase, because it would give businesses time to adjust to the change.
Now the captain of our ship has shifted gears and announced that we are opening the throttle, to near full speed ahead. Some skeptics are wondering where the money will come from. Skeptical employers worry that persons who are presently making $5.00 per hour will demand more, and those who are presently earning more than $5 per hour will also want more when they see people below their pay scale jumping up to their level. It shouldn’t matter what anyone else makes; indeed we should be happy to see our less fortunate brothers and sisters get a boost but, alas, this world doesn’t work that way.
It can’t be that the GOB, seeing the disarray in the main opposition, the UDP, is thinking about an early election, just two years into its mandate. The previous party in power, the UDP, might have been on that course when in June 2015 it agreed to a well-deserved 8% salary increase for public officers and teachers, retroactive to April of that year. In September 2015 PM Barrow followed that with the announcement that a very favorable agreement had been reached on the nationalization of BTL. One month later he dissolved the House of Representatives, and on November 4, 2015, just 3 years and 8 months into its five-year mandate, Barrow and his UDP rolled over the PUP at the polls for a third consecutive time.
There are concerns about this increase which will become law in January 2023, but independent studies show that the minimum wage, even at $5.00 per hour, is woefully low. A decade ago, a $5 minimum wage would have indicated that our economy was beginning to fire on all cylinders. In 2022, $5 per hour doesn’t look like much, and it cannot buy much.
Earlier this year the PM stated that a too high wage increase could “create incredible inflation that can lead us to devaluation.” Today, the all-important peg to the US dollar remains 2 (BZ$) to 1(US$), but data from the Statistical Institute of Belize (SIB) shows the purchasing power of the Belize dollar is far less than what it was a decade ago. Looking at staples, ground beef was $4.29 per pound in 2012, and it now sells for $6.04 per pound, an increase of 40%; rice, sold at $1.08 per pound in 2012, is now $1.57 per pound, an increase of 45%; flour, which had a price of $0.92 per pound in 2012, is now $1.22 per pound, an increase of 32%; eggs, sold at $2.90 per dozen in 2012, now cost $4.56 per dozen, an increase of 57%; and the price of whole chicken, which was $2.59 per pound in 2012, is now $3.03 per pound, an increase of 17%.
The skeptics wonder where the money will come from, but for the GOB it wasn’t an option; it had to implement the increase. It is important for the economy, for Belizeans involved in commerce and industry to respond positively. Actually, there are a number of ways the increase in the minimum wage will benefit businesses. Greater purchasing power for workers means more sales, and happier workers means more production.
The GOB making good on its promised wage increase won’t take any of us out of poverty, but it will surely help us get by. Workers of Belize, if we want more than getting by, if we want to get by “betta”, we have to pay more attention to our dollar. We can continue along the same path we’re on, and watch inflation erode our gains away, or we can make a necessary about turn.
We need to spend less on foreign luxury goods. We have to root out or curb our appetite for products from abroad that we are “addicted” to. We need to prioritize products that are made in Belize. The expiration dates and nutrition information on labels are important, but equally or more important is the strip at the bottom that says it is made at home.
When we buy goods made in Belize, we expend less foreign exchange, which means more of our dollars stay at home and work for us, to help us all win. That wage increase isn’t that much. Its impact will be much greater if we spend it wisely.