Cost of living and immigration dominate minimum wage debate

POSTED: 12/4/13 12:10 PM

St. Maarten – The venom was in the tail of the first round during yesterday’s meeting of parliament where the minimum wage was on the agenda, when National Alliance MP Hyacinth Richardson remarked: “We have to get away from the situation whereby one family is controlling this island.”

Richardson did not mention the family he meant, but he sent a clear message about what in his opinion is the root cause of the high cost of living in St. Maarten.

Members of the National Alliance faction and the independent MP Frans Richardson requested the meeting. Their approach to the minimum wage was clear: it has to go up.

Frans Richardson used a lot of references to international sources – among them the American economist Paul Krugman – to make his case for a higher minimum wage. “A ten percent increase has an adverse effect of less than 1 percent on employment in the retail sector,” he said.

MP Louie Laveist said he wants to do away with the age categories for the minimum wage. Right now, the full minimum wage is for workers of 21 years and older, while younger workers receive a percentage of it. “Lifting a bag of cement is the same for a 16-year-old and a 50-year old,” Laveist said, thereby suggesting that he wants to apply the full minimum wage to 16-year olds.

“Is the current minimum wage sufficient?” he directed a question to labor Minister Cornelius de Weever. “What is your plan of action?”

Then Laveist dove into a political speech after noting that the local economy is currently under the control of “some sort of conglomerate.” “If you give the right party – and that would be the National Alliance – the mandate to govern this country for a full term I guarantee you that the fuel prices and the prices for underwear will go down.”

Dr. Lloyd Richardson noted that an increase of the minimum wage should not affect St. Maarten’s competitive position in the region.

MP Hyacinth Richardson noted that “in Maho they are hiring a lot of illegals and – with a reference to an earlier remark by fellow-faction member George Pantophlet – that cleaners are currently forced to clean forty rooms a day. Richardson noted that the minimum wage ought to be at least 1,600 guilders a month. He asked how the country is doing for signing up counterparts for foreigners who come to St. Maarten in managerial functions.”

Independent MP Romain Laville, who chaired the meeting in the absence of president Gracita Arrindell and first vice president Leroy de Weever, asked the parliament permission to speak from the chair about the minimum wage. This breach of the rules of order was not appreciated by all parliamentarians but they let Laville go ahead all the same.

The MP presented a rough calculation of what a “living wage” – the bare minimum someone needs to survive in St. Maarten ought to be. Taking 300 guilders as the average electricity bill, 1,075 guilders for average rent, 300 to 500 guilders for food and 200 guilders for education, he concluded that 2,000 guilders ought to be the absolute minimum.

“I implore the minister to do something others before him have not done and that is to deal with the cost of living,” Laville said. He also said that the island must “curtail the influx of people.”

“Our social development is crashing, and we cannot continue to have everyone coming into St. Maarten. We have reached a point where we have to say: this cannot continue. All these people have a huge impact on our healthcare system, we have to sign off on new work permits all the time, and they are taking jobs away from our people. To fix this economy, we have to take some tough measures.”

At 6 p.m. the meeting was adjourned for an hour, but when acting president Laville brought down the hammer at 7.18 p.m. he had to adjourn for another 15 minutes because there was no quorum to continue the meeting.

Minister Cornelius De Weever highlighted in the evening session the motivations behind the indexation of the minimum wage per January 1; the system of annual indexation allows companies to budget adequately and it will maintain the purchasing power of employees.

The minister gave some historic date too. Between 1993 and 2000 the minimum wage was 1,100 guilders (6.34 per hour) a level that did not change until 2006 when it went up to 7.97 guilders per hours. After last year’s indexation the rate went to 8.33 guilders and the latest indexation will bring it to 8.56 guilders next year.

“Had we applied the indexation consistently from 2008 on, the minimum wage would now have been 9.68 guilders,” De Weever said.

He said that the new minimum wage is still below the lowest pay scale for civil servants, and that therefore the indexation does not affect these salaries.

SZV had 2,043 insured that are minimum wage earners – 9.7 percent of the total work force. Of all work permits, 592 have gone to minimum wage earners, De Weever said; this is 30.4 percent of all current work permits.

The minister said that the full minimum wage will apply to workers from the age of 18 (as opposed to the current age limit of 21), and that youngsters in the age group 16-18 will receive a percentage of the full amount.

At the end of the meeting MP Frans Richardson tabled a motion that asks Minister De Weever to come within 60 days with the results of a survey into the minimum income people need to sustain themselves and to establish the level of a so-called living wage.

Richardson also announced that he wishes to have a debate about the labor laws and to bring this legislation into the twenty-first century.

 

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