New $50 minimum wage comes into effect March 1

Come march 1, no full-time worker in St. Vincent and the Grenadines will receive a salary of less than $50 a day, thereby ensuring that workers make at least EC$1,000 a month.

“In practice, many low wage workers in St. Vincent and the Grenadines already earn more than the previous minimum wage. So, the initial difference in pay may be more modest than suggested by an average increase of 20%,” Minister of Finance, Camilo Gonsalves said in his Budget Address today (Monday)

He, however, said the government expects that the increase “will create upward pressures on all wages as concerns about wage distribution compression cause employers to consider the compensation of people who previously made just slightly above the minimum wage thresholds”.

Gonsalves said that as an employer of many minimum wage, agricultural workers, caregivers, cooks, cleaners, watchmen and interns, the government will also have to adjust its wage bill upwards.

“We are convinced that this increase is timely, manageable and progressive,” he told lawmakers as he delivered the EC$1.6 billion budget for 2024.

“We are equally certain that today’s announced increases in minimum wages will benefit workers, the wider economy and our pursuit of more inclusive development,” he said, adding that the details will be released immediately and will come into effect on March 1.

The minister said that in some extreme cases, the adjustments will result in increases of up to 75% for monthly paid workers and 56% for full time daily-paid workers relative to the previous minimum wages.

“In most cases, however, the increase will be a more modest 20%,” he said, adding that apprentices, interns and other similar categories including the government’s volunteers Youth Empowerment Service programme workers will receive no less than $40 a day or $800 per month.

Gonsalves noted that the wage adjustment is the fourth since the Unity Labour Party government came to office in March 2001, following increases in 2003, 2008 and 2017.

“As part of our unshakeable commitment to inclusive development and reducing inequality, the government is using the tools at its disposal to ensure that our current economic growth spurt does not leave low wage workers behind,” he said.

“Inflationary concerns are receding, the economy is growing and minimum wages have not been adjusted in over six years,” the finance minister said.

“This is the right time to look out for our watchman, our domestic workers, our cashiers, our bartenders, our cooks, our agricultural workers, our cleaners, our caregivers, our gardeners, and the myriad other hardworking Vincentians, who make invaluable contributions to their family’s well being and international development.”

He notes that 2024 marks the second consecutive year that the government is raising civil servants’ salaries and adjusting the income tax threshold to benefit all workers.

“Civil Servants in 2024 will receive a 2% salary increase across the board on the heels of a 2.5% increase they received last year,” he said, noting that the increase in 2025 will be 2.5%.

“You may recall that we also raised public sector wages in 2018, 2019, and 2020,” he said, adding that the standard deduction on personal income tax will also be raised again this year from EC$22,000 to EC$25,000 annually.

“Budget 2024 therefore ensures that all public sectors will be paid more and all workers will keep more of their salary in 2024.”

Gonsalves said that in arriving at the new minimum wages, the Wages Council, paid specific attention to the low wage jobs that are disproportionately staffed by women.

Among these, he listed cashiers, sales clerks, cleaners, cooks, food servers, receptionists, housekeepers, domestic workers, and caregivers for children and the elderly, who are overwhelmingly women.

“Their minimum wages were also disproportionately on the lower end of the spectrum in the multi-tiered system of compensation regulated by the Wages Council.”

He said that while minimum wages will be increased across the board, women dominated professions will receive “a larger-than-average bump in their pay and compensation.

“Similarly, as previously discussed, our several 750 nurses, nursing assistants and nursing aides will be getting an extra 5% top up on their salary above and beyond the negotiated 2% for all public servants,” he said. 

“Our nursing profession, as we all know, is dominated by women in bigging up the nurses, the prime minister is also bigging-up hundreds of female health care professionals.”