Small businesses across Barbados are bracing for tougher times as they grapple with the financial demands of the new minimum wage, prompting fears of price rises and increased difficulty keeping staff employed, according to business and union leaders.
The Barbados Chamber of Commerce and Industry (BCCI) and the island’s umbrella trade union have each highlighted the challenges now facing micro and small enterprises. While larger companies remain largely unscathed, their smaller counterparts are struggling to balance higher wage bills, potential price adjustments, and the risk of job cuts.
President of the BCCI Paul Inniss said that while big businesses have mostly been insulated by already offering wages above the new minimum, “some of the smaller businesses are impacted in a significant way”.
“And some of the businesses that probably require a significant amount of labour would have to consider the implications for their business, and then try to ensure that they can remain viable from the perspective that they can provide services at a cost that would provide the return to remain in business,” he added.
Inniss revealed that although he has heard industry chatter about some companies reducing staff hours to manage the increased labour costs, “none has so far come from chamber members”. Instead, many businesses are “reviewing the impact and implications for the increase in costs for their businesses”. He cautioned, however, that the market is sensitive to price changes.
“You can only increase your prices to a certain level. The market is very sensitive to pricing…. People would either do without or look for a substitute…. You can’t adjust a price beyond the reach of the consumer. They will eventually refuse to buy at that price, and you will also compromise your business while trying to do that.”
Turning to concerns about job losses, the BCCI president emphasised that, so far, layoffs have not surfaced among members.
“If you are servicing contracts, you need to service those contracts with the requisite resources; and if you compromise a contract, you can lose the contract, then compromise your business,” Inniss said, describing the delicate “dance” that businesses face as they weigh their options.
He added that the minimum wage increase, created through partnership with social partners, comes with both benefits and drawbacks: “We are of the view that you have to look after the people that make your business successful, and that in itself has implications for everybody. There are pros and cons to this whole adjustment.”
The Congress of Trade Unions and Staff Associations of Barbados (CTUSAB) called on businesses to avoid shedding jobs or slashing hours, even as it acknowledges the sector’s struggle.
General Secretary Dennis De Peiza said: “That [reduced hours] is not something the unions would want to promote. But at the end of the day, I have to speak to you realistically. See yourself as a businessman. Business people look to make profit; and if they have to make hard decisions in their interests, well then, that is something the individual has that right to do.”
However, he urged employers to “try as far as possible to retain the staff and look for appropriate strategies [to] reposition their businesses so that they can make or continue to make the margin of profits that they have had over time, or increase on them, so that there is no need for the reduction of hours.”
But De Peiza acknowledged there is no simple fix.
“Those who make the policy, see one thing. They look at the figures, they come to the public with glowing figures of the domestic issues, how much growth we have made, but people are suffering, both individually and business-wise. How are you going to deal with that?”
He described a “domino” effect within society and reminded employers to abide by the law by paying the minimum wage.
For the Intimate Hotels of Barbados (IHB), which represents 38 small, Barbadian-owned member properties, the suddenness of the minimum wage hike meant it was not possible to plan for the increased wage bill. IHB chair Shireene Mathlin-Tulloch told Barbados TODAY that while “nobody has had a problem with the minimum wage”, a new challenge has arisen with workers in higher wage brackets now seeking increases, even though no immediate budget exists for further rises this year.
“What it has done is that it has closed the gap between those positions and the one above. So, the people… in the wage group just above, they are all now looking for increases… because, some of the increases from the minimum wage are basically at the same place as the categories above,” she explained.
Mathlin-Tulloch added that laying off staff or reducing hours had not been widely reported.
“It has been so hard with labour recently that I am not sure that people even have the extra people to send home,” she said. “Everybody is working extra to cover for people for the shortages. It’s not like it was before.”
emmanueljoseph@barbadostoday.bb
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