Aug. 4, 2008 — It's no secret that the territory's cost of living is high, but local policy makers must have access to hard data on exactly how much money average people need to support themselves or their families for the government to be able to help, according to local economists and labor experts.
Members of the Senate's Committee on Labor got the process started Monday by unanimously passing a bill appropriating $100,000 to the Bureau of Economic Research (BER) to conduct a living wage study and determine what residents need to be earning, at a minimum, to cover basic living expenses such as housing, food, child care, health care and transportation, among other things.
A 15-member board — consisting of various government officials and representatives from local non-profits, chambers of commerce in both districts and labor unions — would advise the bureau on "all matters" relating to the development of a living wage standard, according to the bill. A final report would be issued by BER no later than March 31, 2010 highlighting the pros and cons of implementing a living wage.
The study, once complete, could possibly serve as the baseline for the government's future economic policies and help to establish a new minimum wage for the territory, said bill sponsor Sen. Basil Ottley Jr.
"We're basically trying to set a self-sufficiency standard in the Virgin Islands by exploring all the costs a typical family has to deal with and how it's impacting them," he explained after the meeting. "Safety net features must be put in place to allow the people to sustain themselves if they can't afford to do so on what they're currently earning."
For most Virgin Islanders, simple necessities such as power bills or transportation costs account for most of a household's disposable income, Ottley added during the meeting. "I think what frightens us is the reality of the kind of numbers we're seeing and what they mean to the families who are struggling every day," he said. "It's time for serious decisions to come into play here."
Tying the living wage to a consumer price index — which shows increases over time in the price of various goods or services — would also ensure that residents can continue to stave off poverty, according to local economist Frank Mills.
But pouring money on the problem might not be the only answer, Labor Commissioner Albert Bryan said during the meeting. Though a study is needed to provide officials with the "economic data that will prove what it costs to live" in the territory, investments in education and training for employees are also needed to uplift local standard of living, he said.
"Simply giving people more money doesn't erase poverty if people don't have access to basic things like jobs or training opportunities," Bryan said. "The study should also look at all the indicators, and I think that it would show that we also have to invest in things like education as a commodity, not just material things."
The establishment of a living wage standard would also help to put in place poverty guidelines for the Virgin Islands that have not yet been developed or used by the federal government, according to Human Services Commissioner Chris Finch. The federal poverty guidelines upon which some living wage standards are based are not applicable to the territory, where the average household's annual income of $33,474 is below the median income of every other state in the nation, BER officials added.
"It is also argued that the federal minimum wage is at its lowest value in terms of purchasing power in more than 50 years and does not provide families with even the most basic needs," said BER Chief Researcher Lauritz Mills. "Hence the need to enact economic vehicles such as living wage ordinances that would help lift some families above the poverty line."
Looking at whether businesses, which might have to pay employees more, could still remain financially viable and competitive if a living wage is implemented is also part of the study, Mills added. But given the "magnitude" of the work involved — which includes surveying households, along with both private and public sector employers and employees — a $100,000 appropriation is not enough. It would take twice as much for BER to complete the project, she said.
Senators passed the bill onto the Rules and Judiciary Committee with a favorable recommendation, along with another bill preventing employers from forcing their employees to participate in political or religious events.
Present during Monday's meeting were Sens. Liston Davis, Juan Figueroa-Serville, Louis P. Hill, Terrence "Positive" Nelson, Ottley, Ronald E. Russell, Celestino A. White Sr. and Alvin L. Williams.
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