Finance Minister of St. Vincent and the Grenadines Camilo Gonsalves stated that the government cannot, does not, and will not dictate wages to the private sector.
The reply made by Gonsalves came in response to a query posed by opposition legislator MP Fitzgerald Bramble. However, Gonsalves stated that the government has done, is doing, and will do a variety of measures that will have a good impact on the earnings of private-sector workers.
“First, the government in announcing the salary increase for next year, also announced that they were convening the Wages Council before the end of this year and that Wages Council is expected to increase the minimum wage for all workers, that is private sector workers as well. That’s the first thing. So on the minimum wage side, the government will adjust the minimum wage and that has been announced at the same time that we announced the salary increase”.
” Secondly. Reducing personal income tax and increasing the threshold for taxes means that all workers, public and private sector workers, will pay less income tax next year, which will mean they will have more money in their paychecks next year. The tax cuts as well as at the corporate level will allow the private sector employer more money on hand, which they can then invest in their workers, either in the form of hiring additional workers or in increasing their wages. So the government has from the minimum wage, from the tax threshold and from the reduction of income tax already positively impacted the take-home pay of the private sector workers in St Vincent and the Grenadines”.
Gonsalves said there is an interaction between public-sector wages and private-sector wages.
‘I don’t know if the question was referring to the interaction, because MP Bramble says whether the government will address it. This doesn’t address it because that implies some active intervention to adjust private sector wages but there is an interplay between public sector wages and private sector wages in many cases. Essentially, the evidence shows, that the growth in public-sector wages and in public-sector employment will positively affect the growth of private-sector wages. Why? If you make more money in the public sector, the private sector has to compete to hire people who would otherwise go and work in the public sector and if more people are getting jobs, labour becomes scarcer, so you will have to offer more money to get people to leave where they are working and move to the private sector”.
Gonsalves said if you are raising wages in the public sector and your economy is growing and more people will be employed as a result of growth, which has an upward effect on private sector wages.
