Senator Hubert Frederick during a Rules and Judiciary Committee meeting on legislation proposing a phased increase to the private-sector minimum wage in the U.S. Virgin Islands. Photo Credit: V.I. LEGISLATURE.
“If you think the cost of living in the Virgin Islands is high today, wait until we implement the increase in minimum wage.” That was a warning from Senator Hubert Frederick as the Committee on Rules and Judiciary considered legislation to increase the minimum wage in the private sector.
According to Senator Frederick, “that’s just business.” A business owner himself, Mr. Frederick did not seem too keen on implementing the bill as written. However, as a non-committee member, he could comment during Thursday’s meeting but held no voting power.
Senator Frederick suggested that Bill 36-0030 be amended to make special provisions for “mom and pop businesses” who will “not be able to afford paying higher wages for their small businesses at this time.” Mr. Frederick suggested that implementation of a minimum wage increase in the private sector take a “graduated form.”
The proposal calls for a phased increase in the minimum hourly wage to $16.00 over three years. Under the plan, the wage would rise to $12.00 ninety days after enactment, followed by annual increases until reaching $16.00 per hour.
According to Senator Frederick, the current lack of business activity near the cruise port is already due to high operating costs. “They don't make a lot of money, as it is, and if they have to pay people $16 an hour, why are they going to even come down and try to provide a service?” he questioned.
He believes that to foster a more vibrant small business landscape, accommodations must be made. “We're going to have to have an amendment to allow people to pay a little less because they're not able to carry that heavy cost of labor,” he stated plainly.
“This has nothing to do with the ability to buy a home and live a better life…We have to make sure we provide our businesses an opportunity to survive,” Senator Frederick continued.
He suggested that “with the appropriate amendment, I think this would be a great piece of legislation for those businesses that could afford it.”
The St. Croix senator reminded those listening that businesses “don't eat the cost. They pass it on to consumers.”
“So if you're willing to pay more, increase your minimum wage,” he said, a comment perhaps directed to committee members. Despite their colleague's ventilated concerns, the six committee members present on Thursday voted in favor of the bill.
This included Senator Angel Bolques, who had initially expressed some concern over the proposed legislation. Bill 36-0030, he said, fails to address “several other key issues.” He lamented that it “doesn't fix or reactivate or replace the wage board to ensure that ongoing reviews continue,” nor does it provide “sector-specific guidance for industries such as small business or tip workers.” He also complained that “the bill doesn't hold the governor accountable in a timely manner to appoint the wage board members.”
According to Bolques, there is also “no enforcement language” in the measure, nor is there a requirement to conduct a study to “track the financial impact of the outcomes of the bill.”
The bill moves to the upcoming Legislative session, where it is expected to be given a final seal of approval by lawmakers. It is unclear whether amendments to fix the deficiencies outlined by Senator Bolques will be forthcoming at that time.
“Our goal is clear: to adopt phased increases, to catch up and keep up with cost of living,” Senator Marvin Blyden, a sponsor of the bill, said. “This is about governance that works and economic common sense. Virgin Islanders cannot sustain 2025 prices on 2018 wages,” he declared.
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