Tuesday, April 23, 2024

Minimum wage to increase to $5 per hour this July; cost of living still on the rise

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On Thursday, March 24th, during the sitting of the House of Representatives, Deputy Prime Minister Honourable Cordel Hyde announced that as of July 1st, the minimum wage would increase from $3.30 to $5 per hour. Belizeans welcome this increase when the cost of living rises due to inflation caused by factors such as elevated fuel prices.

The increase in the minimum wage was part of the current administration campaign promise under the People’s United Party manifesto. On page ten, their manifesto called Plan Belize, their vision spoke about creating thousands of jobs once the economy recovered from the blow of the COVID-19 pandemic. These jobs would concentrate on tourism, services, technology, agriculture, micro, small, and medium enterprises, and the offshore sector. While all these sectors have improved, tourism has rebounded tremendously, and now Belizean farmers/cattle ranchers are exporting to countries like Mexico.

The other promise was to officiate the $5 per hour wage and provide employer tax credits for agricultural businesses and low-profit margin firms as the economy recovers. In the future, the other goal is to abolish the system of ‘Pay as You Earn’ income tax in the next five years and increase the income tax deduction threshold to $30,000.

While these are promises in the works, the increase in the minimum wage is a go now. Deputy Prime Minister Hyde said this move takes place two years ahead of schedule. “No more starvation for our workers,” he said. The last time the minimum wage increased was in May 2012 and was phased in over five years between 2007 and 2012.

Cost living on the rise

The military conflict between Russia and Ukraine and the rise of fuel in the international market are blamed for the country’s inflation. Fuel prices in Belize have been steadily rising, triggering an increase in essential food items. In San Pedro Town, Ambergris Caye, primary food products like chicken have increased close to 0.40 cents more a pound, and a tray of eggs is now over $9 in most stores. In other staples like beans, rice, and vegetables, prices have also increased, including the constant increase for services and products in transportation. One mode of transportation to get to the island is via water taxi. The roundtrip of a ticket to San Pedro is now nearing $70 per adult round trip. The amendment to the minimum wage is therefore well-received by the working class. A little more in their paycheck means people can stretch their dollars to pay for services and put food on their tables.

Plan Belize aims to work ceaselessly to build a prosperous society. The current government plans to alleviate the situation by increasing the cost of living due to fuel price surges by establishing a fuel stabilization mechanism to provide some level of price predictability. This process will not just look after the citizens but will protect fiscal targets in respective national budgets.

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