In a phone interview, Senator Surangel Whipps, Jr. said the Toribiong version of the bill has no concrete basis and simply does not jibe with reality.
“I and the President agree that there should be a minimum wage increase and it is long overdue. But I think his approach is not the right one,” Whipps stressed.
According to Whipps, the president’s proposal does not reflect cost of living increases.
The Toribiong bill would increase the minimum wage by $0.10 every six months starting October 11, 2011 until the $3.50 per hour minimum wage is in effect.
“The minimum wage should be increased in a way that it reflects the rising cost of living,” he declared.
“With the rate of increase of the cost of living since 2000, the minimum wage should have already been $3.23 per hour today. Yet, if the president’s bill prevails, the $3.50 per hour increase would only be realized in 2016. The $3.50 increase should be in effect sooner so that workers can keep up with inflation,” the senator added.
From 2000 up to now the cost of living in Palau has gone up by 26 percent, and is still increasing.
“With that trend, I think the increase proposed by the President would only have a little value for the working people who are intended beneficiaries of the measure,” Whipps pointed out.
The bill, if it becomes a law, will affect the more 10, 000 workforce in Palau, of which more than 3, 700 are foreigners.
Whipps said that the proposal he advanced earlier is more attuned to the rising cost of living.
Whipps has earlier proposed a three-phased minimum wage increase, but his bill, like three others before, “died” in committee.
The Whipps proposal would increase the minimum wage to $3.50 an hour in three phases. Based on the proposal, there would be an initial increase of 50 cents to $3, and then an increase of 25 cents until the $3.50 per hour minimum wage will be in effect.
“That would enable workers to keep up with inflation over time,” he stressed.
While voicing his strong disagreement to the Toribiong bill, Whipps said that it is not yet certain how he will vote in the end.
“If the final consolidated bill satisfactory answers my concerns, then I’ll vote for it,” he declared.
Last week Pres. Toribiong introduced a bill in the Senate which seeks to increase the minimum wage to $3.50 from the current 42.50 which has remained stagnant since 1998.
The Palau Senate approved the bill on first reading in its session last week.
Under the proposed bill, effective April 1, 2011, every employer in the Republic shall pay a minimum wage of $ 2.50 per hour to each employee, excluding other benefits provided to the employee by the employer like food and housing allowance.
Then commencing October 1, 2011, and every six months thereafter, the minimum wage every employer is required to pay shall increase by $0.10 per hour until a minimum wage of $3.50 per hour is in effect.
The Toribiong bill, if enacted into law, applies to both to both Palauans and foreign workers with some exceptions.
Attempts in the past 12 years to increase the minimum wage have not been successful, as minimum wage bills filed have not advanced past committee level in both the Senate and the House of Delegates.
