Misrepresentations in Parliament

First Published: 2000-06-09

The summer of 2000 could be the beginning of the Bahamian “year of discontent”. Old laws relative to two major areas of the economy… labour and the financial services… are being changed. In the first case there is speculation on the potential downsizing of the banking sector, and in the latter there is uncertainty over the impact of the proposed labour bills.

A “national labour contract”, falsely described as minimum standards, includes a minimum wage, shorter workweeks and numerous other mandates altering current employment practices. These will increase labour costs and lead to higher prices in the hotel, construction and other industries and /or reduced employment.

The confusion and uncertainty is not helped by misinformation contained in the parliamentary debates. Regrettably Mr. Tommy Turnquest used a flawed study in his support of the minimum wage. He cited a study by two economists, David Card and Alan Krueger, that examined the effects of a 1992 increase in New Jersey-s minimum wage. It showed that a 19 percent increase in the minimum allegedly was accompanied by a rise in employment.

This study has been thoroughly discredited by numerous researchers including Nobel Laureate Gary Becker who stated “the Card/Krueger studies are flawed and cannot justify going against the accumulated evidence from many past and present studies that find sizable negative effects of high minimums on employment.” This forced Alan Krueger to state “my comment should not be interpreted as support for the position that increasing the minimum wage is sound public policy.”

In the same debate, misrepresentation of facts were made when Mr. Turnquest used National Insurance Board data to state that 22 percent of the 110,072 enrollees are paying National Insurance on wages that are “currently below the proposed minimum wage”. He neglected to point out that the figures quoted do not take into account commissions, bonuses, gratuities and other income not categorized as a “wage”. If you wish to make a false impression that a large percentage of the population is living on borderline income, then you ignore numbers that do not support your argument. This appears to be what Mr. Turnquest was doing.

The risk of an economic downturn, the result of blacklisting and labour legislation, is real. It is ironic that Parliament, where laws are made, should be the venue for deception that undermines trust and thereby the rule of law.

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