By INDERIA SAUNDERS, Guardian Business Desk, Inderia@nasguard.com

Cost of living hikes are unlikely to motivate employers to boost the wages of their workers, President of the Bahamas Chamber of Commerce Dionisio D'Aguilar said yesterday.

It is an option he feels many of his members, a wide cross-section of Bahamian employers, would be "loath" to do.

"It's not as simple as giving everybody a raise to cover the cost of living," he told Guardian Business. "If you are a hotel operator and your costs are rising and you're already losing money, how can you increase wages?"

Obie Ferguson, President of The Bahamas Trade Union Congress, take a dissenting view, arguing Bahamian employers can make that move or at the very least find creative ways of easing the growing burden of putting bread on the table.

"Instead of looking at a direct injection in wages, there are some other methods of giving their workers the cash injection," he said. "Instead of the company giving a 10 percent (salary increase), they can give, say, a five percent increase and look at implementing other cost-effective measures to make up that other five percent."

It's a debate that's only expected to grow louder as the economy feels the effects of skyrocketing global fuel costs and the slowdown in the U.S. Those factors have had a telling effect on the cost of living in this country, according to the Central Bank.

From February 2007 to February 2008, The Bahamas has experienced a rise in its consumer price index — the best marker of inflation — from 2.1 percent to the current 2.4.

Many consumers have resorted to pinching pennies as they've watched food prices steadily grow by nearly four percent, health care bills increase by 3.3 percent and the cost of household items climb another 6.1 percent. All of that in the course of a year.

While D'Aguilar acknowledged that the purchasing power of average Bahamians has decreased within recent months, he says that's also the case for Bahamian employers.

As the Chamber head, he asserts that any move to increase salaries across the board would only spark a further hike in prices of goods and services, ultimately exacerbating cost of living woes facing consumers.

He suggests that business owners are ill-prepared to move now to implement the kind of cost of living increases that many American workers receive. He'd prefer to see The Bahamas adopt a wait and see attitude in order to gauge if current inflationary trends stabilize.

"The fact is you don't know by how much energy costs are going to go up," he asserted. "There is just too much volatility in the cost of businesses."

There's also the possibility of job losses if the government moved to bring in a cost of living scheme, with employers forced to trim the fat from the job rolls, retaining only the most dedicated workers, D'Aguilar pointed out.

"The employer may say I can do it with two instead of three people," he said Wednesday. "Do you want a situation where you have 300 jobs with people getting $2 a week or do you want two jobs at $300 a week."

Still, Ferguson is urging Bahamian bosses to find other ways of helping workers now struggling to meet their financial obligations. There are strategies like car pooling, day care assistance, etc.

"If (the workplace) is a wash house, where they buy in bulk, then they could, say, for the next seven months allow workers to wash family clothes there for free and provide them with the washing powder," he said.

That kind of assistance during tough times, argues Ferguson, is necessary as employees across the country watch their saving dwindle by nearly 25 percent. "If you are making $150 now, it's like making $100 because everything has gone up."