June 13, 2008
Job cuts likely with new Wages Orders

Employees’ celebration over the new wages orders may be short lived, as for some unemployment may beckon.##m:[more]##

From July 1, the new wages ordered are expected to take effect for seven categories of workers, including the three categories added in 2003: hotel workers, security workers and workers in the offices of professionals. The other categories are Industrial workers, agriculture, domestic workers and shop assistants.

“The cost of doing business is going up, and the fact the wages are going up, some people are seriously looking at their operating costs,” said Jerry George, President of the Chamber of Industry and Commerce.

George told SEARCHLIGHT that businesses are already struggling, so a unique balancing act is necessary, “because workers have to be paid.”

He said that policy makers, businessmen, down to the average man have to address the situation of the economy and the pressures being brought to bear on it, and the various ramifications.

President of the St Vincent and the Grenadines Hotel Association Bianca Porter also acknowledged the uniqueness of the situation.

She said that the rising cost of living is affecting workers, therefore the increases are necessary. However, on the other side of the coin, hotels are facing serious external pressures, including rising oil prices which is affecting air travel.

“In the next six to eight months, hotels will have to look at whether or not they will keep their full staff or they may be forced to lay off workers,” she said, adding that she believes laying off will be a last resort for hotels.

“The thing is, employees have to buy food, pay bills, they have children to go to school, but right now it is tough for a business to give salary increases, even though the workers deserve it,” she said.

Some increases for hotel workers include a $75 per month increase for receptionists, from a minimum of $600 to $675, room attendants from $500 to $565, and chefs from $1000 to $1100.

While the President of the Small Business Association Marlon Stevenson is also concerned about the effects of an increase on businesses’ wages bill, he is more concerned about the level of productivity of workers.

Stevenson told SEARCHLIGHT that it is one thing to pay higher wages, but businesses need to be sure that they are getting value for their money.

“No business likes to increase cost of operation, but the big thing for small businesses is if they could get a fair day’s work for a fair day’s pay,” Stevenson said.

Stevenson echoed the sentiment that some businesses are operating on the borderline, and said that he, too, expects some lay-offs to take place within the next couple of months.

The Wages Councils were established in August of last year, and workers, employers and the government were represented on each council. The process was chaired by Economist Godson Caine.

In addition to addressing wages, provision was also made in two categories, security workers and workers in professional offices, to be paid for the proportionate part of the vacation due on termination of service.

Security guards make up one of the groups that will enjoy an increase under the new order, with the minimum wage going from $600 to $720 per month, while guards employed on a day to day basis will now receive $30 for an eight hour day, up from $25.

(See pages 29 – 34 for the full listing of the new Wages Orders)