Central Bank chief of Barbados suggests low-wage earners may need pay raise to combat inflation

Low-wage workers in Barbados may need a pay raise to help deal with inflation caused by a spike in world oil prices, the Central Bank governor said.

Marion Williams's remarks in a national address Friday seemed to signal a reversal of her earlier stance that pay raises weren't necessary because of a recently enacted personal tax cut and cost of living adjustment.

But with inflation running at 4 percent on the Caribbean island so far this year _ four times as high as the same period in 2004 _ Williams said employers may need to rethink that strategy.

"Perhaps at the lower end of the income spectrum, there may be a case for some (pay) increases, but I'm not in a position to commit myself to any particular formula ... without a little bit more in-depth analysis on the benefits or costs," Williams said during her quarterly economic report.

The minimum wage in Barbados is US$2.50 per hour, although most workers on the island of 277,000 earn more.

The government has blamed the rising cost of living in part on soaring world fuel prices, which are hovering above US$61 a barrel.

The increase comes amid rising world demand, instability in the Middle East and concerns that U.S. Gulf of Mexico oil facilities recovering from hurricane damage will struggle to meet heating-oil demand as the Northern Hemisphere winter approaches, AP reported. V.A.