6 Responses to “Price control before minimum wage can make sense - Wheatley”

• r***ie (29/06/2012, 11:41) Like (0) Dislike (0) Reply

  When is the NDP going to address the minimum wages for we poor people?
• E. Leonard (29/06/2012, 23:29) Like (0) Dislike (0) Reply

  Undoubtedly, given the spiraling cost of living, it is challenging for both citizens and residents to live comfortably on $4.25 an hour (gross $340 bi-weekly, $680 monthly). Nevertheless, I'm not too sure if establishing price floors or ceilings is the recipe for addressing this critical problem. Establishing ceilings and floors is treating the symptom, not the root cause of the problem. The BVI is a market economy. An in efficient market, prices are a function of supply and demand; prices are the pitting of consumers trying to maximize utility and producers trying to maximize profit. The law of demand states that consumers buy more a lower prices and less at higher prices; the law of supply states that producers supply more at higher prices and less at a lower prices. Moreover, other locales have tried price ceilings and floors with very limited success. Prices control often results in poor quality goods or services and shortages. In 1970s the US during the presidency of Nixon tried to imposed price control on food but it failed and quickly abandoned. Price control encourages demand but discourages producers from producing, resulting in shortages. Lets look at the minimum wage. In the market, workers supply labor and businesses demand. At a minimum wage price above the market equilibrium price, workers are willing to supply labor but businesses demand less. This process creates a surplus of labor, increasing unemployment. Artificial minimum wage above the market equilibrium price can hurt the workers that it was intended to help. For example, if the minimum wage is raised, businesses typically raised prices due to the increased operational cost. This does put the workers in a better position. If setting a ceiling on prices and raising the minimum wage is not the answer, what is the fix. There is no magic wand to solving this problem. One solution is to grow the economy and to train and educate workers to take advantage of the opportunities in the growing economy.
  • grace (02/07/2012, 13:13) Like (0) Dislike (0) Reply

    People are aware of the law of supply and demand. This have absolutely nothing to do with the government minimum wage initiative. The business people who have a problem with raising the minimum wage is because they want to work people for nothing while they get rich. We import everything, and there are minimum wage and price control in those places. I know of employers who pay their workers less than the minimum wage as less as the minimum wage is at present. The poor people are afraid to complain, because they have no one to protect them from the wrath of their employers.. We have to stop being so damn backwards and stop supporting nonsense, because E. Leonard and Diaspora is talking pure rubbish. When we pay fair wages and charge fair prices for products and services everyone prospers. When you get rich by being unfair the riches does not stay with you, and even though you might be rich you still look poor. That wealth that you gain unfairly becomes your curse.
• Diaspora (30/06/2012, 18:45) Like (0) Dislike (0) Reply

  Raising the minimum wage is a good talking point for politicians. Threatened by constituents, they often enact laws setting minimum wages. But there are no clear cut evidence that minimum wage works. As noted by another commenter, E. Leonard, the laws of supply and demand determine the true wage rate. The behaviour of consumers support these laws. Specifically, consumers buy more at lower prices and less at lower prices. Similarly, producers produce more at higher prices and less at lower prices. In regards to minimum wages, businesses are views as consumers and generally hire more workers at a lower rate. On the other hand, workers are viewed as producers. When businesses hire less workers, unemployment spikes. In essence raising the minimum wage can hurt the people that it was intended to help. Further, the market sets prices. And normally most businesses pay above any set minimum wage. For the most part, minimum wage do not work. When minimum wage rates akre raised, the raised is reflected in prices. Similarly, effect of pr ice control highly questionable. Again prices are set by supply and demand. Price controls have been tested in other countries with little to no success. For example, in the southeast US rent control was tried. Rent prices were set below market equilibrium. And some owners abandoned apartments, converted some to appartments, maintained property at the minimium level or got out of the business altogether. Price control in essence resulted in poor quality services and shortages. And if implemented in the BVI the same results can occur. True, BVI consumers are hurting. But price control may not be the prescription for curbing the rising cost. Another prescription is needed for this has been tried with little relief.
• Quiet Storm (02/07/2012, 12:33) Like (0) Dislike (0) Reply

  The minimum rate in nearby St. Thomas is for the most part $7.25 an hour; whereas, in the BVI it is $4.25 a 42% lower rate. The $7.25 rate mirrors the US rate. From personal experience trying to survive, not live, on $4.25 is a severe hardship. We boasts as having one of the highest standard of living and quality of life in the region. But poor and unskilled is not living it . The folks on the lower end of the economic need some relief. But as some other bloggers noted setting minimum wage and instuting price controlis is not a panacea for improving the plight of the poor. In fact economics show that these actions can exacerbate the plight of the poor. The solution is a focus on education and training. But even focusing on education and training will not move all the into at least the lower middle income level, for a myriad of reasons unfortunately there will be workers at the lower end of the economic ladder. The pay at this level needs to be as fair and reasonable as practical. Some may argue that one should learn more to earn more. But this is not always possible.
• grace (02/07/2012, 12:46) Like (0) Dislike (0) Reply

  Yes we need price control as well as a Consumer Department. I got back from NY a few days ago and gas price is down to $3.19 per gallon. Why when the price of oil go up, they are quick to jack up the gas pumps, but when the price go down they don't hear the news. Oil price is down and gas prices are falling every week, what's up with the gas suppliers in this place? Why can't they practice fair and ethical business practices? Why the HELL the government is not addressing this issue? It is the same thing with BVI Electricity. That organization have a contract with Delta, which I believe lock in the price they pay for oil for the duration of the contract. Then why is it that this usage fee that they tag on to our bill varies and is so high. We are being taken advantage of and we don't have any one looking out for us..