THE EDITOR, Sir:
THE RECENT 17 per cent increase in the minimum wage from $2,400 to $2,800, while probably well-intentioned, may well do more harm than good to the society, and in particular smaller enterprises, the unemployed or, to be more specific, persons actively seeking employment.
This policy of periodically legislating higher wages at a time when productivity and earnings are down for most business is nothing more than a punitive tax and a wonderful soundbite for the announcing politician and cheering trade unionists. This helps to increase the global uncompetitiveness of the investment environment. In countries like China, you can get four to five workers for that money calculated at J$60 to US$1. That is one of the reasons China gets so much investment while Jamaica continues to suffer from investment starvation.
In the face of low productivity, someone has to pay for this increase. It is ultimately going to be the already overburdened consumer, thus driving inflation even further, while making the workers' overall condition worse, not better.
Legislating a minimum wage puts restraints and legal impediments in the way of an employer being able to agree with a potential worker in accepting a wage below the legal minimum. The law of the land takes precedence and one can be arrested and taken before a court and charged for so doing.
In a free market, market forces should be allowed to work, or at least private treaties between employee and employers should be allowed legal status without punitive action being threatened. If this is done, it would have a significant impact on unemployment and crime.
I am, etc.,
MICHAEL SPENCE
Micspen2@hotmail.com
P.O Box 630
Liguanea, Kingston 6
