Report: Small firms support minimum wage

Some small businesses in Barbados appear to support an increase in the national minimum wage.

This is the finding of research which the Small Business Association (SBA) conducted among 75 of its members.

Reporting on the findings in the SBA’s 2024 annual report, Robert Homer, chairman during the fiscal year 2023/2024 said on behalf of the board of directors that “one third of the respondents opined that the minimum wage was acceptable while 67 per cent indicated it was not”.

“This suggests that small firms may be in favour of an increase in the minimum wage contrary to a view often held that such increases would be detrimental to small businesses more so than other firms in the private sector,” he said.

With 64 respondents (85 per cent) indicating they were aware of the current national minimum wage, 67 per cent of members surveyed proposed an increase.

This ranged from $9.50 per hour to $30 per hour, with the majority of businesses proposing $10 per hour followed by $15 hour, Homer said.

Effective April 1, 2021, a national minimum wage of $8.50 an hour, which is equivalent to $340 a week, became law.

Delivering Budgetary Proposals in March, Prime Minister and Minister of Finance Mia Amor Mottley said the national minimum wage would be reviewed, including to give consideration to any increase in inflation.

The Barbados Statistical Service’s (BSS) Labour Force Survey for the second quarter, reports that at the end of June 2 600 people were earning under $200 a week, meaning under the national minimum wage. This was 1 700 women and 900 men.

Below minimum

The number of workers taking home below minimum wage is higher overall as the BSS outlined that there were 42 000 individuals earning between $200 and $499 a week – 22 800 women and 19 200 men.

The SBA said that in addition to the minimum wage, its exploratory survey assessed two other areas of interest for small businesses – approved small business status and Government concessions.

Most of the 75 surveyed were from the professional services sector, followed by general services, whole and retail, manufacturing and agri-business.

Homer said seven members (nine per cent) of respondents indicated that they benefited from Government concessions.

“This suggests that not a significant percentage of members may be impacted by the Labour Clauses Concessions Act. However, the SBA will still continue its advocacy and education in this area,” he stated.

Eight SBA members (11 per cent of respondents) were registered as an approved small business which meant they could benefit from the 5.5 per cent corporation tax rate for small firms with gross incomes of $2 million or below.

“This has implications for the effectiveness of the tax regime, particularly among small and medium enterprises which may be incorporated and earn a profit. Efforts should continue to lobby for a change in this framework or alternatively for a simpler process for businesses to become approved to access the concessional tax rate,” Homer said in the board of directors report.

He added: “Sixty respondents or 80 per cent of members indicated they are desirous of becoming an approved small business. This suggests that the majority of members would like to access the low tax rate and the other benefits this status provides.”

(SC)

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