Productivity

Studies have revealed that employee morale and work ethic increase when employees believe they are paid a fair wage, and higher wages have been linked to higher productivity in general [1]. Belize has one of the lowest labor productivity levels in the region at $7.7/hour (PPP$) despite shifting towards a more service-oriented economy over the past few years. Unfortunately, alternative productivity measures are not readily available and the high rate of informality raises questions about the accuracy of productivity statistics. A careful assessment of labor productivity is required to identify the potential impact of a raise in the minimum wage.

Productivity (measured as GDP per person employed) has continued on a downward trajectory since 2007 - falling by more than 25% since then (see figure below).

Productivity, measured by GDP per person employed [2]

1. Source: Raising the Minimum Wage: Good for Workers, Businesses, and the Economy (Fact Sheet). Committee on Education & the Workforce Democrats. Accessed at: edlabor.house.gov
2. Source: World Bank World Development Indicators