The Statistical Institute of Belize noted that for the month of July, the cost of transport went up by 6.3% and the cost of water, housing, electricity, gas and other fuels by 0.4%. Dr. Leroy Almendarez of the University of Belize explained how people in the minimum wage bracket might be affected.
Dr. Leroy Almendarez of the University of Belize
“The heart of the question is your wage is not adjusting to the change in inflation at some point in time really you basically can’t meet your budgetary- whatever you budgeted for you can’t maintain even your level of standard and you fall into poverty. And within that same just coming back to recession think about two things happening there, initially inflation occurring and unemployment increasing a simultaneous occurrence of that is called stagflation because really the economy is really being challenged in terms of its growth but in some economies larger economies and I’m sure it happens in some cases in Belize where there is a cost of living adjustment where they monitor inflation and once you monitor inflation – and if its anticipated because you have anticipated and unanticipated if its anticipated then you can actually put in but there can always be a clause in there that adjust your wages based on…. because your buying power will decrease and you will be working but frustrated because you can’t buy the very same basic things you need. And then we get further into something called a misery index. What is a misery index when you add inflation plus unemployment because some of those people will end up being unemployed at some point in time that is what’s going to happen then the misery index gets factored in. That misery index is when imaging I’m unemployed and the price levels are high I can’t buy anything but that is what inflation will do to you.”
In Belize, the minimum wage is $3.30 per hour, a twenty cents increase that was given some five years ago. Love News spoke to the Co-Chair for Belize Leaders for Social Justice, Moses Sulph who is championing the cause of the disadvantaged to make their lives better.
Moses Sulph – Co-Chair for Belize Leaders for Social Justice
“Minimum wage is not for people who are skilled people but however the job that they do is very important. For instance if we would then decide that we don’t have the sanitation workers for two weeks I almost guarantee that the city would be a bed of garbage. Now there is also an underlying fact of the level of inflation over the past ten to fifteen years which is by our estimation is over 150% and it’s very simply. I’ll take you down to neck and back for instance. In around 2009 that was about .25 a pound now it’s a dollar a pound so that has increased by 200% so it’s showing you that cost of living is going up and people’s wages remain the same. In fact people’s wages have depreciated because even though the minimum wage was last raised in 2012 by .20 cents the buying power you had then was more than now because you could have bought about eight pounds of neck and back out of your minimum wage and now you can only buy one and a half or two pounds.”
It can be noted that one of the effects of a recession is a fall in real wages. As explained by Dr. Almendarez falling real wages means that a worker’s paycheck is not keeping up with inflation. The worker might be making the same amount of money but his purchasing power has been reduced. These expenses would have further eroded the purchasing power of every dollar earned by all hard working Belizeans particularly those who are paid the current minimum wage of $3.30 per hour.