Palau’s minimum wage to increase to $5 an hour by 2025

After almost 10 years, Palau’s Congress, or Olbiil Era Kelulau, have increased Palau’s minimum wage to $5 per hour in two 75-cent increments. On Oct. 1, 2024, the island nation’s minimum wage will increase to $4.25 per hour; and on Oct. 1, 2025, the minimum wage will jump to hit $5 an hour.

The nation last passed a minimum wage increase law in 2013 bringing the minimum wage to $3.50 an hour. Since taking office, President Surangel S. Whipps, Jr. has called for an increase in the minimum wage and the two Houses of the OEK have each deliberated over different versions of legislation to raise the wage. In March, Whipps submitted to the OEK a supplemental budget request for FY2024 that included the rise in minimum wage, among a considerable list of subsidies and benefits to Palauans, such as the increased monthly stipends for people who are blind or in a wheelchair, and the creating of the Child Raising Subsidy, the first of its kind in Palau. The increased minimum wage for the nation follows two similar 75-cent jumps in wages for those working in the national and state governments over the last two fiscal years.

The OEK’s House and the Senate, on June 7 passed a joint bill that Whipps then signed into Public Law 11-34 on June 10. The new law adds a little over $13 million to the $119 million FY2024 budget, bringing those numbers to $133 million, the largest unified budget the nation has passed. The FY 2024 year ends Sept. 30, 2024.

Palau isn’t the only neighbor looking to increase minimum wage and social benefits to help people as inflation increases the price of foods and goods.

Earlier this year, President  Hilda C. Heine announced plans for a series of unprecedented social protection programs for the Marshall Islands population, according to Journal files.

The returning elected leader of the Republic of the Marshall Islands will introduce a universal basic income program by Oct. 1, aiming to support citizens amid insufficient wage increases.

The program will offer $800 to $1,000 annually to each citizen, funded by the Compact trust fund, to improve living standards for those residing in the Marshall Islands.
There also is a proposal to raise the minimum wage from $3 to $5.25 per hour over three years, despite potential mixed economic consequences. A study reveals that one-third of workers earn below the current minimum wage, and the wage increase could lead to an additional $18 million in labor costs for the private sector. Legislation and a task force are in progress to detail and advance the universal basic income initiative. mbj