PHILIPSBURG:--- Parliament has now passed and approved a motion to halt for a period of no less than two years the issuance of all work permits to unskilled, semi-skilled and skilled foreign workers, except for company directors and managers, with the objective, to increase employment opportunities for St. Maarteners. These baseless recommendations, not founded in logical economic policy, aimed at playing with the emotions of the Electorate, have sparked concern from the St. Maarten Hospitality & Trade Association. It seems that some politicians are underestimating the electorate.
As Ms.Patricia Pantophlet's, former president of the WICSU, stated in her article of November 18th, 2013 on the topic of increasing the minimum wage and the increase in the cost of living as a side effects of such an unstructured proposal: "Generally the public understands and can differentiate between a genuine political statement or initiative to a purely political statement and an initiative for campaigning purposes in the run-up to 2014 elections". SHTA concurs with the sentiment expressed in her article, that Members of Parliament should 'go back to the drawing board' and revisit their proposals and motions. The electoral landscape has changed and voters are very capable of discerning political rhetoric from genuine plans to move the country forward.
SHTA's main concern is that no adequate research was done to support the work permit motion, that due to the seasonality of our main industry, figures fluctuate considerably month by month, making them outdated by the time they are published. Furthermore, work permit and economic policies need to be synchronized. If there is a freeze on work permits, then there should also be a freeze on all economic activities. Doing so would of course severely hamper the productivity and as a result weaken our economic output, resulting in amongst other things lower revenues for government.
Although the SHTA agrees that the local work force should have priority when it comes to recruitment and hiring of personnel, this is unfortunately not always possible, due to a mismatch between the output of local educational system and the demands of our local economy. Consequently, restricting permits in order to facilitate the local workforce, without a clearly structured plan to get the available labor in sync with the job market (by for instance re-training), is equally futile as a call for another increase in minimum wage.
Pointing out similarities between Curacao and St. Maarten, in his article of December 17th, published in the Today Newspaper, notable Curacao businessman and philanthropist Jacob Gelt Dekker, mentioned that the last few years have shown a tremendous mismatch between the education system--the level provided in the schools, and what employers seek. According to Gelt Dekker, the local labor force is insufficiently educated and trained to fill business requirements and he believes nobody will hire unproductive workers. Thus equating the real minimum wage to zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they lose their jobs or fail to find jobs when they enter the labor force. Making it illegal to pay less than a given amount does not make a worker's productivity worth that amount—and, if it is not, that worker is unlikely to be employed. A proposed freeze in permits similarly will not automatically make the available labor qualified, leading to an increase in cost of doing business. As available qualified labor gets severely restricted the result is stagnation in economic activity. The proposed restriction in work permits will thus increase the cost of doing business, consequently resulting in an increase in the cost of living, which at the end of the year will result in an increase or indexation of the minimum wage...thereby creating a vicious inflationary cycle the island's economy will have a hard time getting out of.
Apart from the negative impacts on the cost of living and inflation, these measures counter the call to action by the CBCS of July 2013 to improve the investment climate. A call to initiate economic policy that will stimulate the economy in the short term and result in a sustained higher growth and more employment in the future; to implement a policy that focuses on strengthening the competitive position of St. Maarten to stimulate the growth of exports (read: tourism). Moreover, the climate for investment should improve substantially enough to stimulate direct international investments in the country. A consistent implementation of such growth strategy would contribute to the necessary stable macro-economic environment in which our young country can flourish. The measures presented in the motion passed by Parliament do exactly the opposite.
The St. Maarten Hospitality & Trade Association, the largest business representative on the island, is dedicated to bringing quality to all aspects of life on St. Maarten by promoting sustainable economic development for its members in cooperation with the social partners and the creation of a fair marketplace. For more information, please contact the SHTA office: 542-0108, e-mail This email address is being protected from spambots. You need JavaScript enabled to view it. or visit our website www.shta.com.