June 17, 2005 – "When WAPA goes up, you pay it. When the telephone costs go up, you pay. When the cost of gasoline goes up, you pay it." That's how Sen. Shawn-Michael Malone responded to hearing business leaders testify that it would be bad for the economy if the minimum wage is raised.
He said that in the business equation, little value is attached to workers.
However, opponents of a bill to raise the hourly minimum wage from $5.15 to $6.15, said they were on the side of the worker.
Testifiers such as Fred Laue, president of the St. Croix Hotel and Tourism Association, and Adriane Dudley of the St. Thomas /St. John Chamber of Commerce said that if the minimum wage was raised, many low-skilled workers would be closed out of the work place.
Laue said a business had three choices when wages were raised: go out of business, raise the cost of its services or reduce the number of workers it employs. He said that the third option was the most likely.
As obvious as the divide appears to be between Malone and Laue, the debate Friday in Frederiksted was not usually clearly defined.
Sen. Liston Davis questioned government officials testifying to see if he could learn precisely where they stood. However, that did not work.
Dave Barber, director of the Bureau of Labor Statistics said, "It is my job to supply you with information, facts and statistics. You have to make the decisions."
Labor Commissioner Cecil Benjamin reiterated several times that more research was needed to assess the economic impact of raising the minimum wage.
However, Lauritz Mills, director of the Bureau of Economic Research, was unequivocal. She said her statistics supported a raise in the minimum wage.
She said it was her best guess that 14,000 workers were now living on a minimum-wage salary.
Her statistics showed a constant rise in the cost of living in the Virgin Islands since 1997, when the minimum wage was last hiked. She said, even with a raise in the minimum wage, an employee working full time at that wage would be below the poverty level.
She said that presently over a quarter of the population in the Virgin Islands is living under the poverty level.
Luis Morales, president of the Central Labor Council, echoed many of Mills' concerns. He said many of the islands' social problems were the result of low wages. He said, "The cost of living has skyrocketed. This is why we have children running around at night unsupervised. Their parents are working two or three jobs."
He added that, "Today, not even a single person can live on $5.15 per hour."
Laue's argument took a different tack. He quoted from a 1996 Joint Economic Committee Report called "The Case Against a Higher Minimum Wage." It said that raising the minimum wage was "job-destroying."
The report also said the "minimum wage is irrelevant for most people in poverty" and that most people earning minimum wage are college or high school students living at home.
Mills argued that raising the minimum wage would be a stimulus to the local economy because low-wage earners tend to spend their money locally.
This sparked a conversation among the senators whether businesses were contributing their fair share to the economy. Davis question Mills whether she thought an economy that sees $4 billion in gross receipts should not be contributing more than $600 million to the government.
Instead of addressing the minimum wage issue directly, Morales spent half of his presentation time talking about whether companies receiving EDC benefits actually contributed any thing to the economy of the Virgin Islands.
Sen. Ronald Russell questioned whether workers had benefited from the improvement in recent years of the V.I. economy.
Sen. Juan Figueroa- Serville asked that the government testifiers supply statistics showing the relationship between the last hike in the minimum wage and the unemployment rate.
After four hours of discussion, the committee voted to hold both bills in committee for at least 30 days.
The Labor and Agriculture Committee also discussed a bill to make waiters and waitresses no longer exempt from the minimum wage law. Committee Chairman Terrence "Positive" Nelson said he thought the bill would probably die.
The committee did resolve to ask the governor to activate the Wage Board and make appointments to it.
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