Prime Minister Andrew Holness promised to double the minimum wage from J$16,000 to J$32,000 over the course of his next term, if his administration is re-elected on Wednesday, September 3.

He, who was speaking at a JLP rally in Spanish Town on Sunday night, said it is important to put in place a livable wage in Jamaica that sees more people having money in their pockets. 

This latest news follows the JLP’s decision to reduce income tax to 15 per cent on a phased basis, which it says is expected to cost the country between J$30 billion to J$20 billion.

Explaining his decision to increase the minimum wage, Prime Minister Andrew Holness said in Spanish Town, “In our first budget, the minimum wage will move from $16,000 to $18,500 and then gradually after that for the next few years.

“At 3.3 per cent unemployment, you are practically at full employment. People are not making decisions to leave what they are doing. Many of them are at home, many of them are at the street side, some of them are hustling, and so the incentive to work at that level is not strong enough.

“So by increasing the minimum wage gradually, you shift the incentive to work. So you are going to get Jamaicans voluntarily deciding to move out of the unemployment pool and into the labour pool, and that will give greater opportunity for growth in the economy.”

Big promises are being made by both the JLP and PNP, but they hinge on economic growth, which has eluded Jamaica for decades, with the country averaging just 0.8 per cent over the last decade and unable to go beyond 2 per cent.

Currently, tourism receipts are down, so too are remittances, two of the largest foreign exchange earners in Jamaica.

Then there is President Donald Trump’s unpredictability and tariff regime, which has not factored in either party’s manifesto and campaigning.

To raise the minimum wage to that level would mean greater productivity is required and less reliance on imports in the short term, something hitherto Jamaica has been unable to accomplish.

To date, the Private Sector Organisation of Jamaica (PSOJ), The Jamaica Employers Federation ( JEF) and the Jamaica Chamber of Commerce (JCC) have not commented on whether the Prime Minister’s announcement is feasible and what impact this decision is likely to have on the economy.

Speaking on the Prime Minister’s big move, economist Irving Biram from the Economic Journal said: “Raising the minimum wage so quickly in a stagnant economy will put enormous pressure on businesses and employers. Does Jamaica have a significant productive sector with an absorptive capacity? It will need skilled labour to drive the technological-based industries it touts. This will displace many workers. The literacy rate in Jamaica is very low.

“Politicians love to make promises on the campaign trail, but many are unable to keep them because the reality makes it impossible. To reduce income tax by 10 per cent and then raise the minimum wage so quickly will put stress and strain on the exchequer.”