Minimum wage goes up to $10.50 on June 1, 2018 in USVI
CHARLOTTE AMALIE, St Thomas, USVI- The US Virgin Islands (USVI) minimum wage is set to see its final phased increase to $10.50 per hour as part of a bill ratified by the 32nd Legislature and signed into law by Governor Kenneth E. Mapp.
The three-step increase, which saw the hourly wages of US Virgin Islands employees going from $7.25 to $8.35 in 2016, then from $8.35 to $ 9.50 on June 1, 2017, will increase to $10.50 on June 1 of this year.
According to Government House, during a recent cabinet meeting on St Croix, Governor Mapp instructed commissioners to raise the salaries of government workers in compliance with the minimum wage increase set for next month.
According to the Fair Labour Standards Act, state governments have the right to set a higher minimum wage than the current federal minimum wage rate. Roughly 29 states, including California, Florida, New York and New Jersey have enacted legislation increasing their state’s minimum wage. Studies have shown that increasing the minimum wage does not have a negative effect on small business, as some have claimed, and in fact contributes to an increase in the overall health of local economies.
‘Simply not enough’
The sponsor of the bill, Senator Jean A. Forde, had said that $7.25 was simply not enough to earn a decent living. “This is a tremendous victory for working people, as the plain fact is that the minimum wage of $7.25 is simply not enough to live on,” Mr Forde said after the bill was signed into law. “It is heartbreaking to see people going out and working hard every day, only to find that their paychecks cannot meet even their most basic needs.”
Federal minimum wages have not been increased since 2010, however the cost of living has seen a sharp uptick throughout the country, particularly here in the Virgin Islands where the cost of electricity alone has risen by 11 percent between the years of 2010 through 2015.
“Adjusting the minimum wage to take into account the increases in the cost of living, especially around such basic necessities as food, rent, and clothing, will go a long way to eliminating the “working poor” in our community and improving the overall quality of life for all of our residents,” said Mr Mapp after approving the measure.
“While this step is not the answer to all of our economic development and opportunity needs, it is a significant step in the right direction,” he added.
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16 Responses to “Minimum wage goes up to $10.50 on June 1, 2018 in USVI”
Moreover, theorectically, the minimum wage is a supply(workers) and demand (employers) issue, ie, more is demanded at a lower rate and less at a higher rate. Generally, there is a large supply of low skilled labour so a high minimum wage can lead to fewer people being employed, resulting in a potential rise in unemployment among the low skilled and hurting the people it (minimum wage) was intended to help. However, on the other side of the coin, in practice, low skilled workers spend a higher perecentage of their wages on food, shelter, clothing, entertainment........etc than other others, boosting the economy. Putting more money in the pockets of low skilled workers, ie, tax cut, boosts the economy. They earn less but has a propensity to spend a higher a percentage of their wages. As the saying goes, if you want to boost the economy put money in the pockets of those at lower rung go the economic ladder.
That said, while $10.50/hour is quite a lot more than $ 6/hours, keep in mind that USVI payroll taxes are higher than the BVIs, so the net gain is not as high as it appears at first blush. And, $10.50/hour is no living wage in the USVIs.