Thu | Dec 9, 2021

Letter of the Day | Minimum wage hike doesn’t hinder hiring

Published:Thursday | October 14, 2021 | 12:08 AM


Three United States-based economists – Joshua Angrist, David Card and Guido Imbens – won the prestigious Nobel Prize for Economics for pioneering research that transformed widely held ideas about the labour force, ‘showing how an increase in minimum wage doesn’t hinder hiring’ ( Gleaner, October 13).

The research dismantled the myth often used in Jamaica, USA and the world, that minimum wage hike hinders hiring.

However, this finding and research is not novel to Jamaica. Two decades ago, Danny Roberts, trade unionist extraordinaire, writing in The Sunday Gleaner, said, “In 2002, the minimum wage was increased by as much as 50 per cent and despite predictions of a calamitous fall in employment, the unemployment figure actually decreased from 16 per cent in 2002 to 15.4 per cent in 2003. So, too, was the case in 2005, when the minimum wage was increased by 20 per cent and the unemployment fell from 15.0 per cent in 2005 to 11.5 per cent in 2006” (See that quote in my book, Enduring Advocacy for a Better Jamaica, page 118).

Roberts did his research and showed that minimum wage hike does not hinder hiring.

But in Jamaica, every time there is an increase in minimum wage and for security guards, there is the usual mantra that people will lose their jobs because of the hike. Roberts is a prophet without honour in his own country but hopefully the Nobel committee might want to mention people like Danny Roberts.


In addition, too often capital gives the impression that they have the interest of minimum wage earners by agitating for keeping wages low in order to prevent unemployment. Perhaps, capital should perceive trade unionists as consultants rather than troublemakers and rabble-rousers, who can help their company be more productive and grow. Trade unionists should be seen as important stakeholders in a company and in the country, helping policymakers in framing their policies and plans.

I want to prophesy that the next time there is an increase in the minimum wage, whether in Jamaica or the USA, that is reasonable and above the inflation rate, the chorus from capital will be that it will cause people to lose their jobs in spite of the research of Roberts, these Nobel Prize winners, et al.

So often capital and politicians are averse to data and the ‘Big Lie’ about minimum wage will continue. However, let well-thinking Jamaicans mash down that lie, that minimum wage hike hinders hiring.