44% hike in minimum wage
Prime Minister Andrew Holness on Thursday announced a 44 per cent increase in the national minimum wage, triggering loud and sustained desk-thumping among Government legislators and shouts of “Radam!”, Jamaican slang used, in this case, to express delight.
Holness, who was delivering his presentation in the 2023/24 Budget Debate in Parliament, said that from June 1, 2023, the national minimum wage will increase from $9,000 per 40-hour workweek to $13,000 per 40-hour workweek.
The increase, he said, is the largest in 20 years, setting off more shouts of approval on his side of the chamber.
“Since assuming office in 2016 the minimum wage has increased from $6,200 to $13,000, so this Administration has increased the minimum wage by 110 per cent in seven years,” he declared to more applause.
Pointing out that cumulative inflation over the same period was less than 50 per cent, and even in US dollars it represents a 66 per cent increase in the minimum wage, Holness boasted, “This Government has done more than any previous Government to create prosperity for Jamaica and Jamaicans, and we are proud to share the gains with all Jamaicans.”
The Government, he said, recognises that the contribution of minimum wage earners, such as household workers, artisans, labourers, store clerks, and security personnel, is vital to the success of manufacturers, hotel professionals, lawyers, doctors, and teachers in meeting the country’s national productivity and service targets. As such, the Administration “is committed and prepared to take decisive action to set minimum wage earners on the right track towards a liveable wage”.
He also announced an increase in the minimum wage for industrial security guards from $10,500 per week to $14,000, which will also take effect on June 1, 2023.
Holness explained that the $1,000 differential between the national minimum wage and the minimum wage for the security guards will be removed at the next increase.
Noting that the security industry supports every other industry in Jamaica, the prime minister said the Administration “is deeply saddened” by the fact that, in recent times, security guards have come under attack and “too many have lost their lives on the front line”.
“We have engaged employers in the security industry to improve the conditions of work for our security guards, ensuring that the necessary statutory payments are made so that they will qualify for housing and national insurance pension,” he said.
Holness also told the Parliament that, effective April 1, 2023, the flat rate for the minimum weekly National Insurance Scheme (NIS) pension will be increased by 74 per cent, moving from $1,700 to $3,000.
“The pensioner who currently receives $2,550 per week will now receive $3,500 per week, a 37 per cent increase, and those at the top will receive a 24 per cent increase, moving from $3,000 to $4,200 per week,” he said.
Holness reminded the House that an actuarial review conducted in 2013 had shown that the sustainability of the NIS was threatened if immediate steps were not taken. “In fact, the projections at that time were that cash flow would be negative by 2025 and the scheme would be bankrupt or run out of money by 2033.”
He said the Government took decisive and deliberate steps to implement a raft of reform measures, the last of which was implemented in 2022 and, based on the performance of the National Insurance Fund, the old-age, widow, widower and invalidity pensions and all other benefits payable under the NIS will be increased effective April 1, 2023.
Those increases, he said, will be announced by the minister of labour and social security.